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Progressive 

Congressional 

Program 


This pamphlet was prepared by 
the National Legislative Reference 
Committee of the Progressive 
Party, at the request of the 
Progressive Members of Congress. 


PUBLISHED BY THE 

Progressive National Service 

Forty-second Street Building - New York City 


PROGRESSIVE MEMBERS OF CONGRESS 

VICTOR MURDOCK, 


Kansas 

C. W. BELL, r 


California, 

J. W. BRYAN, 

- 

Washington 

WALTER M. CHANDLER, 


New York 

IRA C. COPLEY, 

- 

Illinois 

J. A. FALCONER, 


Washington 

WILLIAM H. HINEBAUGH, 


Illinois 

W. J. HULINGS, 


Pennsylvania 

M. CLYDE KELLY, 

- 

Pennsylvania 

A. WALTER LAFFERTY, 


Oregon 

F. E. LEWIS, 

- 

Pennsylvania 

C. A. LINDBERGH, 


- - Minnesota 

WILLIAM J. MACDONALD, 


Michigan 

JOHN I. NOLAN, 


California 

ARTHUR R. RUPLEY, 

- 

Pennsylvania 

WILLIAM D. STEPHENS, 


California 

HENRY W. TEMPLE, 

- 

Pennsylvania 

CHARLES M. THOMSON, 


Illinois 

A. H. WALTERS, 

- 

Pennsylvania 

R. O. WOODRUFF, 


Michigan 

LEGISLATIVE REFERENCE BUREAU 

Committee 

WILLIAM DRAPER LEWIS 


GEORGE W. KIRCHWEY 

Chairman 


BEN B. LINDSEY 

JANE ADDAMS 


CHARLES E. MERRIAM 

HENRY F. COCHEMS 


GIFFORD PINCHOT 

JAMES R. GARFIELD 


HERBERT KNOX SMITH 

FRANCIS J. HENEY 


WALTER E. WEYL 

DONALD 

R. 

RICHBERG 



Director 

ONO MARY 

IMHOFF 


Assistant to the Director 



-f-J IS 

83 


INTRODUCTORY NOTE 

The following bills are presented as the tentative program of legisla- 
tion adopted by Progressive Members of Congress. Criticism of the 
measures proposed is cordially invited. 

There is a long, hard road from a platform declaration to a bill in 
fulfilment of the party pledge, and thence to a law upon the statute books. 
The Progressive Party established a Legislative Reference Bureau to 
carry forward its Contract with the People. From April to December, 
1913, Progressive Congressmen and this Bureau were energetically en- 
gaged in the translation of certain planks of- the National Platform into 
bills in Congress. 

First . — In order to limit effort to capacity, a careful selection of 
important measures was made by a joint conference. Then a member 
of Congress and a member of the Legislative Reference Committee was 
assigned to be responsible for each measure. Co-ordination of the work 
of these individuals was made the duty of the Director of the Bureau. 

Second . — As drafts of bills were prepared conferences were held to 
consider and revise the suggested provisions. 

Third . — After final approval the bills were introduced (63rd Con- 
gress, 1st session) and a brief statement of the purpose and content of 
each was issued to the press. 

Fourth . — The preparation of this pamphlet was authorized in order 
that the bills might receive wide consideration and criticism by students 
of the problems involved. 

These measures are submitted as expressly tentative in form. The 
principles underlying them have been for the large part definitely fixed 
by the national platform and by authoritative conferences of experts in 
the various subjects. Yet even in the matter of underlying theories of 
substantive law or administration, it is the purpose of those presenting 
these legislative proposals to invite criticism and to welcome and to adopt 
practical suggestions of improvement from all sympathetically interested 
in the work. 

By the direction of the Legislative Reference Committee a brief state- 
ment of the need for legislation and an abstract of the tentative remedy 
has been prepared and is printed as an introduction to each of the pro- 
posed bills. 

Donald R. Richberg, 

Secretary, Legislative Reference Committee. 

January, 1914. 


















CONTENTS 


Measures for Social and Industrial Justice. 

FAGE 

H. R. 6146 Prohibition of Interstate Transportation of Child 

Labor Products . 5 

H. R. 7755 Prohibition of Interstate Transportation of Convict 

Labor Products 15 

H. R. 7026 Workmen’s Compensation for Federal Employees... 23 
H. R. 6210 Women’s Eight Hour Law for District of Columbia 3 7 


Investigative Commissions for Social, Political and Business 


Problems. 

H, R. 5696 Commission on Social Insurance 41 

H. R. 5819 Commission on Naturalization 49 

H. R. 6283 National Rivers Commission 57 

Political Freedom. 

H. J. Res. 95 Amendment to U. S. Constitution making Amend- 
ment easier 63 

Permanent Administrative Commissions to Insure Fair and 
Stable Business Conditions. 

H. R. 4813 Tariff Commission 67 

“The Trust Triplets” 

H. R. 9299 (1) Interstate Trade Commission 83 

(To create the Commission) 

H. R. 9300 (2) Interstate Trade Commission 98 

(To prevent unfair competition) 

H. R. 9301 (3) Interstate Trade Commission 99 

(To suppress monopolies) 










































































































. 


. 


















































CHILD LABOR 


THE PLEDGE. 

“The supreme duty of the nation is the conserva- 
tion of human resources through an enlightened meas- 
ure of social and industrial justice. We pledge our- 
selves to work unceasingly in state and nation for: — 

The prohibition of child labor.” 

— Progressive National Platform. 


THE FULFILMENT. 

H. R. 6146. Introduced by Representative Ira C. Copley of Illinois, 
June 1 7, 1913. Referred to the Committee on Interstate and Foreign 
Commerce. 











Prohibition of Interstate Transportation of Products 
of Child Labor 


THE NEED. 

The purpose of national legislation to prohibit interstate commerce 
in the products of child labor is twofold : First, to eliminate child labor 
from industry so far as is within the power of the Federal Government ; 
and second, to protect the industries of States prohibiting child labor 
from the unfair competition of States which do not so protect children. 

In his masterly address delivered in the United States Senate January 
23rd, 28th and 29th, 1907, Senator Albert J. Beveridge estimated the 
number of children employed outside of agricultural pursuits, according 
to the best statistics available at the time, and concluded : 

“I suppose we may say, putting it upon a conservative basis, that 
as I speak to you here there are now not less than one million children 
under sixteen years of age (and I shall show by sworn testimony that 
some of them are five, and six, and seven years of age) at work in 
the coal mines, in factories, and in the sweatshops of this nation. ” 

The National Child Labor Committee, in its Pamphlet No. 185 has 
summarized the causes and effects of child labor. A brief abstract of 
the authoritative statements in that pamphlet will show succinctly the 
need for the proposed legislation. 


Causes of Child Labor. 

The first obvious cause for the exploitation of children is the dire 
poverty of their parents. A government investigation covering 3,297,819 
wage earners showed average weekly earnings of $10.06, and of the total 
number of men, 1,215,798 earned $10 or less a week. It is a cruel result 
of such conditions that children should be forced into industry at an 
average weekly wage of $346, as shown by the same investigation; thus 
inevitably forcing down the wages and the opportunities of labor for 
adults. 

The second great cause for child labor is the demand by employing 
interests for labor at the lowest possible cost, regardless of legal or natural 
restrictions, and ready adaptation of children’s labor to mechanical tasks 
requiring little intelligence or initiative. It is a proven fact that many 
employing interests insist upon the use of children as a condition of 
employment of adults. The adoption of differing rates of rental for 
company houses by certain mills has been a method of bringing about 
this result ; houses where one ‘‘hand” lives being rented at a much higher 
rate than houses where two or three “hands” reside. 


7 


A third cause lies in the failure of the schools to hold the interest 
and attention of children and particularly their failure until recently to 
adequately take into consideration the needs of defective children, who 
fall behind in their studies, who becorne discouraged and leave school. 

The growth of child labor in the United States is directly chargeable 
to a public indifference for which public ignorance is entirely responsible. 
As Professor Charles R. Henderson writes : 

“Ignorance obscures the vision of social value and of cost in 
parents . . . The arguments published by mill owners show that 
they are ignorant — I will not say wilfully ignorant — of the effects 
of factory and mill labor in England, Germany, France and all other 
older industrial nations. There is no other explanation of their 
neglect short of a charge of sheer brutality. Ignorance of the general 
public, of legislators, of teachers, of lawyers, of governors,, of 
preachers and editors, is in great measure the cause of our criminal 
negligence as a people.” 

But, the causes of child labor, although illuminating the problem 
somewhat, are far less important to the present consideration than its 
effects. The causes may point the way to a solution, but the effects show 
the imperative need for action. 

The Effects. 

The effect of industrial labor upon the health of children presents 
the strongest indictment of a Government which permits such exploitation 
of its future citizens. Children are necessarily awkward. Their muscles 
are growing. Exhaustion by fatigue is inevitable from continuous labor. 
Accidents due to illiteracy, fatigue and incapacity to appreciate and under- 
stand dangers are very frequent. An investigation by the Minnesota 
Bureau of Labor, exhibited twice as many accidents for boys under six- 
teen as for adults and 33 times as many accidents for girls under sixteen 
as for adult women. 

Growing boys and girls are peculiarly susceptible to occupational dis- 
eases. Sitting or standing in one posture, continual strain upon the 
muscles, nerves, and particularly upon the eyesight, develop physical 
deformities, for example, flat-foot and curvature of the spine. The mill 
boy working in a steam heated factory where the air is hot, or moist, or 
dust-laden, is most susceptible to nose, throat and lung troubles. Neces- 
sarily, the power of resistance to the ordinary diseases of childhood is 
lowered. The breaker boy, the glass factory boy, the children drafted 
into an amazing variety of industries involving work in a dust filled 
atmosphere or with poisonous acids, gases or dyes — all these are inevitably 
exposed with more or less certainty to disease and bodily injury. Even 
excepting the enormous number of cases of actual disease, deformity and 
permanent crippling that result from the employment of children, there 
is still left the terrible fact that all the thousands and thousands in the 
great army of child workers are absolutely denied the necessary condi- 
tions for normal physical development. 

No argument is needed to show the illiteracy imposed upon future 
generations by the employment of children during the period when they 

8 


should be in school. It will doubtless amaze the average individual to 
learn that (according to Andrew S. Draper, Commissioner of Education 
of the State of New York) : 

“In America . . . there are more people who cannot read or 
write in any language than there are in any other constitutional 
country in the world. In Chicago or New York there is a much 
larger percentage of people ten years old or more who can neither 
read nor write than there is in London, or Paris, or Berlin, or Zurich, 
or Copenhagen, or even Tokio . . . There is a larger percentage of 
illiterate children of native born than of foreign born parents in the 
State of New York. This statement is also true of Illinois. There 
is often a larger percentage of illiteracy in the country than in the 
cities.” 

Child labor has two notably disastrous effects upon industrial condi- 
tions. First, the industries employing children are low wage industries; 
the inevitable tendency of the small wages of the child being to hold wages 
down throughout the industry. In the second place, the employment of 
children means the unfitting of a large per cent, of the next generation 
of adults for skilled occupations. In Massachusetts it was found that 
33% of the children who began work between fourteen and sixteen years 
were employed in unskilled industries, and 65% in low grade industries, 
leaving less than 2% in high grade industries. The results of the Douglas 
Investigating Commission in the same State showed the demoralizing 
influence of factory life upon boys and girls ; their restless wandering 
from one job to another until past the period when they could properly 
be trained for any industry requiring skill and workmanship. To this 
may be added the report of the English Poor Law Commission to the 
effect that : 

“There is no subject as to which we have received so much and 
such conclusive evidence as upon the extent to which thousands of 
boys, from lack of any sort of training for industrial occupations, 
grow up, almost inevitably, so as to become chronically unemployed 
or under employed, and presently recruit the ranks of the unemploy- 
able.” 

The argument that child labor provides the necessary industrial 
training for children to fit them for profitable adult employment has been 
completely refuted by investigations of the facts. The training of chil- 
dren to become accustomed to monotonous tasks of unskilled labor at the 
sacrifice of mental and bodily growth at a time when they should be 
engaged in improving their minds and increasing their physical strength 
is the way to manhood inefficiency. The human product of such training 
will fall far below the average efficiency of the generation. 

From the social point of view, the effects of child labor are most 
degrading. Child labor means family labor. The home becomes the 
sweatshop. There is no home in the sense in which the word should be 
used. The effect upon the moral standards of the child worker is defin- 
itely bad. The control of parents over their children is inevitably weak- 
ened, and the so-called home influence conspicuously absent. Many 

9 


employments in themselves tend directly to undermine the establishment 
of any moral standards. The investigation of the records of the Juvenile 
Courts of seven cities for one year showed that out of 8,797 offenses, 
working children were responsible for 5A7 l > and non-working children 
for 3,326. When one considers that a large majority of the children are 
not working, as is pointed out by the report, “this preponderance of 
offenses among the workers assumes impressive proportions. 

Perhaps, the curse of child labor to the country, and its general 
effect upon the present children and future citizens is best summed up 
in the words of Senator Beveridge, when, after referring to the fact that 
he began physical labor before he was twelve, but that at least it was labor 
in the open air in the fields, on railroad grades, and in logging camps, he 
said : 

“In spite of all that, I do not like to think of the years from 
twelve to nineteen, because it makes me bitter. But suppose my work 
had not been in the open air ? Suppose it had been in the cotton mills 
of Georgia, or the sweatshops of New York, or the glass factories of 
West Virginia, or on the breakers of the mines of Pennsylvania? 
Suppose I had been forced to breathe the poison and had acquired 
the low vices and habits which always result from such physical and 
nervous degeneracy. Even if, as it is, a senseless and unreasoning 
resentment begins to burn in my breast, what would have been my 
condition of mind if I had lived the life that the child slaves of 
America are living to-night ?” 

THE REMEDY. 

The bill in the first section defines the labor of children in certain 
industries and under certain conditions as “anti-social child labor.” The 
next section defines this phrase as “the employment of a child under four- 
teen years of age in any mill, factory, cannery, workshop, manufacturing 
or mechanical establishment, or of a child under sixteen years of age in 
?ny coal mine, coal breaker, coke oven, quarry, or in any establishment 
where poisonous or dangerous acids, gases, or dyes are used, manufac- 
tured, or packed, or in any establishment wherein the work done or 
materials or equipment handled are dangerous to the life and limb or 
injurious to the health or morals of such a child.” 

The unusual phrase “anti-social child labor” is used to give legisla- 
tive expression to the intent of the proposed legislation : the protection 
of society from the stunting of future generations. The second section 
designates such labor as “detrimental to the general welfare and debasing 
to commerce,” expressing the legislative intention to bring the proposed 
law within the power of Congress (recently sustained by the Supreme 
Court), to deny the right of interstate commerce to commodities so 
debasing to the community in production and trade as to be designated 
“outlaws of commerce.” 

The limitation of the scope of the measure is designed to avoid as 
far as possible, practical difficulties involved in the maintenance of an 
elaborate machinery of federal inspection. The present proposal is to 
establish a minimum standard and to insure its national enforcement. 


10 


The administrative provisions are : 

Section 3. The Secretary of Labor shall make a public list of the 
businesses and industries affected together with a list of their products. 

Section 4. Any manufacturer or producer may make affidavit that 
he does not employ the aid of anti-social child labor and be authorized 
by the Secretary of Labor to stamp or label his goods as registered under 
the act. 

Section 5. No carrier shall transport and no manufacturer or jobber 
shall ship initially in interstate commerce, the products of anti-social child 
labor — provided that if goods so produced bear the label of registry all 
persons except the manufacturer are presumed to be ignorant of the use 
of child labor in their production. 

Section 6. The Secretary of Labor after examination of the laws, 
shall certify what states have laws which “substantially prohibit and 
effectively prevent” anti-social child labor as defined — whereupon the 
provisions of the act shall not apply to such states. 

Section 7. Unlawful shipment or transportation or a false affidavit 
is punished by fine of from $100 to $5,000 or imprisonment for not more 
than one year. 

Section 8. A false statement to a common carrier concerning the 
fact of employment of child labor or whether the shipment is an initial 
shipment is made punishable by fine. A carrier is permitted to refuse to 
accept shipments where the shipper refuses to make such a written state- 
ment on demand. 

The aims of these provisions are various: by administrative defini- 
tion to make certain the businesses and products involved ; by exemption 
of states having satisfactory standards and manufacturers who conform 
to the federal standards, to avoid unnecessarily elaborate administration 
and needless restrictions of commerce; by relieving carriers of responsi- 
bility when they take easy steps to protect themselves, to prevent vexa- 
tious interference with the business of interstate transportation. 

A BILL. 

To Further Regulate Interstate and Foreign Commerce by Prohibiting Inter- 
state Transportation of the Products of Certain Forms of Child Labor, 
and for Other Purposes. 

Be it enacted by the Senate and House of Representatives of the United States 
of America in Congress assembled , That the labor of children in certain iridustries 
and under certain conditions hereinafter described is hereby defined as antisocial 
child labor, and that this Act shall be known, referred to, and cited as the Federal 
child labor Act. 

Sec. 2. That the employment of a child under fourteen years of age in any 
mill, factory, cannery, workshop, manufacturing or mechanical establishment, or of 
a child under sixteen years of age in any coal mine, coal breaker, coke oven, quarry, 
or in any establishment where poisonous or dangerous acids, gases, or dyes are 
used, manufactured, or packed or in any establishment wherein the work done or 
materials or equipment handled are dangerous to the life and limb or injurious to 
the health or morals of such a child is hereby designated and defined as antisocial 
child labor and as detrimental to the general welfare and debasing to commerce. 

Sec. 3. That it shall be the duty of the Secretary of Labor, within six months 
after the passage of this Act, to classify and make public a list of such businesses 
or industries as are included within those described in section two of this Act, to- 
ll 


/ 


gether with a list of the products of such businesses or industries; and it shall 
be the duty of the Secretary of Labor to revise from time to time said public list 
as the changing character of industrial establishments or additional information 
received by the Secretary of Labor shall warrant and require. 

Sec. 4. That any person, firm, or corporation which owns or operates a busi- 
ness or establishment designated in section two of this Act and included within 
those businesses or industries listed by the Secretary of Labor as herein required, 
may make or cause to be made by his duly authorized agent an affidavit to the 
effect that no antisocial child labor is employed in his business or establishment, 
and that the products thereof are not produced with the aid of antisocial child labor. 
When such an affidavit in the form duly approved by the Secretary of Labor is 
filed with the Secretary of Labor, the Secretary of Labor shall issue a certificate 
to the maker of the said affidavit, or to the person, firm, or corporation in whose 
behalf said affidavit is made, giving authority to said person, firm, or corporation 
to stamp or label the goods and products of such business or establishment in the 

following manner: “Registered under the Federal child labor Act, Serial No. .” 

The serial number certified by the Secretary of Labor shall be the number given 
to the affidavit on file by virtue of which said certificate is made as herein provided. 

Sec. 5. That six months from and after the passage of this Act no carrier 
of interstate commerce shall knowingly accept for initial interstate transportation 
or knowingly transport initially in interstate commerce the goods or products of 
any business or establishment described in section two of this Act and included 
within those businesses or industries listed by the Secretary of Labor as herein 
provided which have been made with the aid of antisocial child labor or have 
been made in any business or establishment in which antisocial child labor is em- 
ployed; and no jobber, wholesaler, manufacturer, producer, or other dealer in 
such goods and products shall knowingly make initial shipment or knowingly offer 
for initial shipment in interstate commerce any such goods or products so made: 
Provided , however, That in case any such goods or products the interstate trans- 
portation whereof is hereby prohibited shall be presented for transportation and 
transported, stamped and labeled “Registered under the Federal child labor Act, 

Serial No. ,” as provided in section four of this Act, the carrier, jobber, 

wholesaler, or other dealer in such goods or products, excepting the manufacturer or 
producer thereof, responsible for such interstate transportation shall be presumed 
to have been ignorant of the fact that such goods or products were of the character 
prohibited by this Act. 

Sec. 6. That within six months from and after passage of this Act the Secre- 
tary of Labor shall examine the laws of the several States relating to the employ- 
ment of child labor and give public notice and certify to the governor of each of 
the several States whether or not, in the opinion of the Secretary of Labor, the 
law of each particular State substantially prohibits and effectively prevents anti- 
social child labor as herein defined; and the Secretary of Labor shall from time to 
time make such revision of his certificate regarding the laws of the several States 
as the changes therein, or additional information by him received, shall warrant 
or require; and for the purposes of this Act the judgment and decision of the Secre- 
tary of Labor as to whether the laws of a particular State substantially prohibit 
and effectively prevent antisocial child labor as herein defined shall be final. The 
provisipns of this Act prohibiting interstate transportation of the products of anti- 
social child labor as herein defined shall not apply either to the carrier of inter- 
tate commerce or to the manufacturer, producer, jobber, wholesaler, or other 
dealer offering for interstate transportation, or accepting for or transporting in 
interstate transportation, any initial shipment from a State certified by the Secre- 
tary of Labor as prohibiting and preventing antisocial child labor into any other 
State or Territory. 

Sec. 7. That any officer or agent of any carrier of interstate commerce, or of 
any person, firm, or corporation, or any other person who knowingly is a party to 
any violation of this Act, or who knowingly violates any provision of this Act, shall 
be punished for each offense by fine of not more than $5,000 nor less than $100, or 
by imprisonment for not more than one year, or by both said fine and imprisonment, 
in the discretion of the court. Any person making affidavit to the Secretary of Labor, 
as provided in section three, and making a false statement in such affidavit, or any 
person stamping or labeling goods or products in the manner provided in section 
four of this Act, without authority from the Secretary of Labor as provided in said 

12 




section, shall be punished by fine not exceeding $5,000 nor less than $100, or by 
imprisonment not exceeding one year, or by both said fine and imprisonment, in the 
discretion of the court. 

Sec. 8. That any person required, for the protection of a carrier of inter- 
state commerce, to make a written statment as to whether or not goods or products 
are offered for initial shipment as herein defined, or have been produced with the 
aid of antisocial child labor, who knowingly makes a false statement in writing 
in response to such inquiry, shall be fined not exceeding $5,000 nor less than $100; 
and any carrier of interstate commerce is hereby empowered and permitted to 
refuse to accept for interstate transportation any goods or products regarding 
which the shipper refuses to make such written statement upon demand of said 
carrier. 

Sec. 9. That the term “ interstate transportation” as used in this Act is hereby 
defined as all transportation which is a part of interstate commerce comprised 
within the term “commerce among the several States” as used in the Constitution 
of the United States. The term “business or establishment” as used in this Act 
is hereby defined as any place where work is done for compensation of any sort. 
The word “person” as used in this Act is hereby defined to include any individual, 
male or female, any partnership or other unincorporated or incorporated organi- 
zation, or any municipality, public or private institution or organization. The mas- 
culine pronoun wherever used in this Act shall include other genders, and the 
singular number shall include the plural. The term “goods or products” shall 
include any substance, article, or chattel of any kind made or produced or upon which 
or in connection with which any kind of work is done in any business or establish- 
ment as defined in this Act. The term “initial shipment” or “initial transportation” 
or similar terms as used in this Act is hereby defined as the first shipment or trans- 
portation of goods or products in interstate transportation subsequent to their pro- 
duction or manufacture. 














* 





























CONVICT LABOR 


THE PLEDGE. 

“The supreme duty of the nation is the conserva- 
tion of human resources through an enlightened meas- 
ure of social and industrial justice. We pledge 
ourselves to work unceasingly in state and nation for: — 

“The abolition of the convict contract labor sys- 
tem ; substituting a system of prison production for gov- 
ernmental consumption only; and the application of 
prisoners’ earnings to the support of their dependent 
families.” 

— Progressive National Platform . 


THE FULFILMENT. 

H. R. 7755. Introduced by Representative John I. Nolan, of Cali- 
fornia, August 26, 1913. Referred to the Committee on Interstate and 
Foreign Commerce. 



Prohibition of Interstate Transportation of Products 
of Convict Labor 


THE NEED. 

There is a twofold purpose in the enactment of legislation to prevent 
interstate transportation of convict made goods. 

First . — The indirect result: 

By making convict labor less . profitable to prison contractors, politi- 
cal pressure against the abolishment of the contract labor system in the 
various state institutions will be somewhat relieved. The most casual 
investigation of the evils of the lease, contract and piece-price systems 
will convince any intelligent person of the inevitably vicious results to 
the prisoners from a slavery where the task master has not even a finan- 
cial interest in the health and future of his slaves — but is concerned only 
in getting the most work out of them, in the shortest time, at the least 
expense. 

Second . — The direct result : 

By removing the unfair competition of convict made goods from 
interstate commerce, the value of the products of free labor and there- 
fore the value of free labor itself is enhanced. 

Both employer and employe are interested in preventing this unfair 
competition. In a Congressional report made as long ago as 1906, it was 
stated that the United States Bureau of Labor “found manufacturers 
practically a unit in favoring a Federal law prohibiting interstate com- 
merce in prison made goods/’ and the same report pointed out that “the 
state legislatures are generally willing to enact such legislation for their 
several states (prohibiting the selling of prison made goods in competi- 
tion with the products of free labor) but for the fact always emphasized 
by the prison wardens that a state law would not prevent the shipping 
into the state of prison made goods from other states. In other words, 
the state, in endeavoring to protect its manufacturers and laborers from 
the competition of prison made goods can only succeed, by withdrawing 
its own competition, in making the state a better market for the prison 
made goods of other states.” An analysis of convict made goods for the 
year 1903 to 1904, showed 27% sold within the state of production, 51% 
sold without the state and 19% used in public institutions. 

The results of convict labor have been shown to be “demoralizing 
to markets, and business stability, compelling the reduction of prices below 
a fair margin of profit and even the sale of goods without profit, while 
also forcing the reduction of wages in vain efforts to lower the cost of 
production to that of the prison contractor.” 

17 


A startling example of the evil effect of contract convict labor is 
shown in the statement put out by a well known furniture concern which 
utilizes convict labor, in support of its offering of preferred stock: 

“This company pays for its labor, 52c per man per day. This , 
company is supplied free of rent with a factory, with a storage ware- 
house and grounds inside the prison walls and with free heat, light 
and power. To acquire similar facilities as this company has obtained 
free with its contracts, would necessitate additional investment of 
approximately One Million Dollars. Having to make no investment 
for factory buildings, storage warehouses, light, heat or power, the 
company’s funds are kept actively engaged in liquid assets such as 
raw materials, finished goods and accounts receivable.” 

From the standpoint of the competing capitalist and wage earner 
there is something peculiarly unfair in the use by the state of its crim- 
inals to put profits in the pockets of a few greedy exploiters at the expense 
of honest workmen, and of the manufacturers and the producers who 
furnish them employment. The State, supported by the taxation of 
profitable business, uses its revenues to gather together in a prison those 
who are supposed to have preyed upon well-ordered society, and then 
turns the establishment over to a few ruthless political parasites to destroy 
law-abiding business and to deprive law-abiding workmen of their live- 
lihood. It is a monstrous satire on sane, efficient government. 

The evils of contract convict labor from the standpoint of the con- 
vict are many and bitter. He seldom acquires a useful trade (witness 
the knitting machine work of Wisconsin convicts) and the Congressional 
report asserts that: “His prison record is a complete bar to his admission 
to the ranks of non-convict skilled laborers or mechanics.” The abuses of 
any system whereby private profits are made by the employment of 
enslaved labor, are obvious. The speeding up of prisoners to the limit 
of human endurance, and the enforcement of discipline by barbaric 
measures are by-products of a system which is rotten at the roots. It 
is inevitable that, even under best conditions, the excess compensation 
earned by a convict for the support of his dependent family will be 
practically negligible. 

But outside of all question of injustice, of brutalization, of moral 
and physical ruin of the convicts themselves, there is the enormous harm 
done to commercial interests, to manufacturers and free laborers all for 
the benefit of a few wealthy and powerful prison contractors. The pres- 
ent bill is not for the benefit of a class but for the general benefit of the 
public at the expense of only a very small class of social vultures. 

It is an interesting commentary upon both the power of Congress to 
enact this legislation and the need for its enactment, that by the Dingley 
Act, the McKinley Act, the Payne- Aldrich Act, and the Underwood Act, 
Congress has prohibited the importation into this country of foreign 
convict made goods. The same power and similar reasons would seem 
to sustain the validity and merit of the present bill. 


18 


THE REMEDY 


The purpose of the bill is stated in the first section, “to prevent 
unfair competition in interstate commerce between the products of con- 
vict labor and the products of free labor. 

Section 2 defines the products of convict labor to include “all goods, 
wares and merchandise manufactured, packed, produced or mined wholly 
or in part by the labor of convicts in any prison or reformatory.” 

Section 3 prohibits the interstate transportation of such goods by a 
carrier or the interstate shipment by a producer or dealer. 

Under Section 4 it is the duty of the Secretary of Labor to make a 
public report of the penal institutions using convict labor including the 
names and addresses of all contractors and dealers in such products, so 
far as obtainable. 

Under Section 5 it is the duty of the Secretary of Labor to send a 
copy of the report to all penal institutions and users of convict labor 
named in the report and to all carriers of interstate commerce, upon their 
request. 

According to the provision of Section 6 it is possible for any person 
dealing in convict made goods to make affidavit that other goods in which 
he deals are not convict made and upon filing of such affidavit with the 
Secretary of Labor obtain the right to stamp or label such goods “Regis- 
tered under the Federal Convict Labor Act, Serial Number 

thereby relieving commerce of unnecessary restrictions since under Sec- 
tion 7 it is provided that carriers or jobbers handling goods so labelled 
(excepting the person responsible for false labelling) are relieved of 
responsibility for their character. 

Section 8 further reduces the amount of administration necessary by 
providing that the provisions of the Act shall not apply to shipments 
made from states whose laws “restrict prison production or the use of 
convict labor to products for state, county or municipal consumption 
only.” This relieves carriers and dealers in such states. from the responsi- 
bilities imposed by the bill. 

Sections 9, 10 and 11 provide penalties for violation of the Act or 
falsely labelling goods and products or for making false affidavits under 
the provisions of the Act and include definitions of the various important 
terms and phrases used in the Act. 

A BILL. 

To Further Regulate Interstate and Foreign Commerce by Prohibiting Inter- 
state Transportation of the Products of Convict Labor, and for Other 
Purposes. 

Be it enacted by the Senate and House of Representatives of the United States 
of America in Congress assembled , That in order to prevent unfair competition in 
interstate commerce between the products of convict labor and the products of free 
labor the interstate transportation of all products of convict labor is hereby pro- 
hibited. 

Sec. 2. That the term “products of convict labor” is hereby defined to include 
all goods, wares, and merchandise manufactured, packed, produced, or mined, 
wholly or in part, by the labor of convicts or in any prison or reformatory. 

Sec. 3. That six months from and after the passage of this Act no carrier 
of interstate commerce shall knowingly, accept for initial interstate transportation 


19 


or knowingly transport initially in interstate commerce the products of convict 
labor; and no jobber, wholesaler, manufacturer, producer, or other dealer in such 
products shall knowingly make initial shipment, or knowingly offer for initial ship- 
ment in interstate commerce any such goods or products so made. 

Sec. 4. That within six months from and after the passage of this Act the 
Secretary of Labor shall investigate and make public a report concerning the name 
and location of every prison, reformatory, or other penal institution wherein or 
under the direction of which convict labor is used in the production of goods which 
are to be or may be transported in interstate commerce. Such report shall include 
the names and addresses of all contractors, wholesalers, or other dealers dealing in 
such products, whose names and addresses the Secretary of Labor is able to as- 
certain upon diligent inquiry, and it shall be the duty of the Secretary of Labor to 
revise from time to time said public report as additional information received by 
the Secretary of Labor shall warrant and require. It shall be the duty of the public 
officials in charge of every such prison, reformatory, or other penal institution to 
furnish the Secretary of Labor all information necessary for his report; and ih 
case of the refusal or failure of any such public official to reply fully and truth- 
fully to inquiries made by the Secretary of Labor as herein required, the Secretary 
of Labor or any duly authorized person acting in his behalf is hereby empowered to 
invoke the aid of any district court in the United States having jurisdiction in 
said district wherein such aid is required for an order directing said public official to 
make a full and truthful answer to said inquiries of the Secretary of Labor, and 
jurisdiction is hereby granted to such district courts of the United States to issue 
upon petition of the Secretary of Labor, or upon petition of any person duly au- 
thorized and acting in his behalf, the necessary processes and writs to compel full 
and truthful answers to said inquiries of the Secretary of Labor, and any failure 
to obey the order of the court may be punished by such court as contempt thereof. 

Sec. 5. That it shall be the duty of the Secretary of labor to transmit, upon 
publication, a copy of the report made by him as provided in section four of this 
Act, and a copy of all revisions thereof, to every prison, reformatory, or other 
penal institution and every contractor, wholesaler, or other dealer named in such 
report or in any revision thereof. It shall also be the duty of the Secretary of 
Labor to transmit a copy of such report, or any revision thereof, to any carrier of 
interstate commerce upon the request of any such carrier. Every person, indi- 
vidual, or institution named in such report and every carrier of interstate com- 
merce shall be presumed to have knowledge of the use of convict labor in connec- 
tion with goods or products produced or dealt in by any person named in such 
report or in any revision thereof. 

Sec. 6. That any contractor, wholesaler, or other dealer dealing in the products 
of convict labor, and' who is included within those listed in the public report made 
by the Secretary of Labor as herein required, may make, or cause to be made by 
his duly authorized agent, an affidavit to the effect that any other particular goods, 
wares, or other merchandise in which such contractor, wholesaler, or other dealer 
may deal are not produced with the aid of convict labor and are not the products 
of any prison or reformatory. When such an affidavit, in the form duly approved 
by the Secretary of Labor, is filed with the Secretary of Labor, the Secretary of 
Labor shall issue a certificate to the maker of the said affidavit, or to the person in 
whose behalf such affidavit is made, giving authority to said contractor, wholesaler, 
or other dealer to stamp or label the goods or products designated as not produced 
with the aid of convict labor in the following manner: “Registered under the 
Federal Convict-Labor Act, Serial Number — .” The serial number certified by 
the Secretary of Labor shall be the number given to the affidavit on file by virtue of 
which said affidavit is made as herein provided. 

Sec. 7. That in case any products of convict labor the interstate transporta- 
tion of which is hereby prohibited shall be presented for transportation and trans- 
ported, stamped, or labeled “Registered under the Federal Convict-Labor Act, Serial 
Number — as provided in section six of this Act, the carrier, jobber, wholesaler 
or other dealer in such products responsible for such interstate transportation, 
excepting the person, contractor, wholesaler, or other dealer who has falsely so 
stamped or labeled such products, shall be presumed to have been ignorant of the 
fact that such products were of a character prohibited in interstate transportation 
by this Act. 

Sec. 8. That within six months from and after the passage of this Act the 


20 


Secretary of Labor shall examine the laws of the several States relating to convict 
labor, and shall give public notice and designate those States which restrict prison 
production or the use of convict labor to products for State, county, or municipal 
consumption only ; and the Secretary of Labor shall from time to time make such 
revision in said designations regarding the laws of the several States as the changes 
therein shall warrant or require. The provisions of this Act prohibiting interstate 
transportation of the products of convict labor as herein defined shall not apply 
either to the carrier of interstate commerce or to any person offering for interstate 
transportation or accepting for or transporting in interstate transportation any 
initial shipment from a State which restricts prison production or the use of convict 
labor to products for State, county, or municipal consumption only. 

Sec. 9. That any officer or agent of any carrier of interstate commerce, or 
of any person, firm, or corporation, or any other person who knowingly is a party 
to any violation of this Act, or who violates any provision of this Act, shall be 
punished for each offense by a fine of not more than $5,000 nor less than $100, or 
by imprisonment for not more than one year, or by both said fine and imprison- 
ment, in the discretion of the court. Any person making affidavit to the Secretary 
of Labor as provided in section six of this Act, and making a false statement in 
such affidavit, or any person stamping or labeling goods or products in the manner 
provided in section six of this Act, without authority from the Secretary of Labor 
as provided in said section, shall be punished by a fine not exceeding $5,000 nor 
less than $100, or by imprisonment not exceeding one year, or by both said fine and 
imprisonment, in the discretion of the court. 

Sec. 10. That any person required, for the protection of a carrier of interstate 
commerce, to make a written statement as to whether or not goods or products 
are offered for initial shipment as herein defined, or have been produced with the 
aid of convict labor, who knowingly makes a false statement in writing in response 
to such inquiry shall be fined not exceeding $5,000 nor less than $100; and any 
carrier of interstate commerce is hereby empowered and permitted to refuse to 
accept for interstate transportation any goods or products regarding which the 
shipper refuses to make such written statement upon demand of said carrier. 

Sec. 11. That the term “interstate transportation” as used in this Act is hereby 
defined as all transportation which is a part of interstate commerce comprised 
within the term “commerce among the several States” as used in the Constitution 
of the United States. The word “person” as used in this Act is hereby defined to 
include any individual, male or female, any partnership or other unincorporated or 
incorporated organization, or municipality, public or private institution or organiza- 
tion. The singular number wherever used in this Act shall include the plural. The 
words “goods” or “products” as used in this Act shall include any substance, article, 
or chattel of any kind made or produced or upon which or in connection with 
which any kind of work is done by convicts or in any prison or reformatory. The 
term “initial shipment” or “initial transportation” or similar term as used in this 
Act is hereby defined as the first shipment or transportation of goods or products 
in interstate transportation subsequent to the use of convict labor in connection 
with such goods or products. 


1 


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Workmen’s Compensation for Federal 



THE PLEDGE. 


“The supreme duty of the nation is the conserva- 
tion of human resources through an enlightened meas- 
ure of social and industrial justice. We pledge 
ourselves to work unceasingly in state and nation for: — 


“Standards of compensation for death by industrial 
accident and injury and trade diseases which will trans- 
fer the burden of lost earnings from the families of 
working people to the industry, and thus to the com- 
munity.” 


— Progressive National Platform. 


THE FULFILMENT. 


H. R. 7026. Introduced by Representative Arthur R. Rupley of 
Pennsylvania, July 22, 1913. Referred to the Committee on Labor. 




Workmen’s Compensation for Federal Employees 


THE NEED. 

Under modern industrial conditions the relations of employer and 
employee are vastly different from the ancient obligations which are the 
basis of the common law “of master and servant.” The very nomen- 
clature indicates the personal dealings of the bootmaker and the stage- 
coach owner with his wage-earners. The shoe factory with its regiment 
of employees and the transcontinental railroad with its army, give rise 
to new problems in which society as a whole must be considered. 

The U. S. Bureau of Labor estimates that there are annually 30,000 
persons killed and over 1,000,000 victims of non-fatal accidents in indus- 
trial establishments. 

Manifestly some one must pay for this economic loss. A humani- 
tarian social order will not tolerate community indifference to the suffer- 
ings of the maimed and diseased, or to the helpless misery of their 
dependents, nor should the inevitable burdens of a self-respecting com- 
munity be carried by private charity. To suggest that the workman 
insure is simply to lay the burden on the class engaged in the industry 
least able to bear it. The owner of the business, not the employee, should 
bear all the costs of production, reimbursing himself for his expenditures 
in the price of the product. The losses to workmen due to trade accidents 
and trade diseases are part of the necessary cost of production. Work- 
men’s Compensation laws, which in effect carry to the consumer the cost 
of injuries to the workmen, as a fixed charge upon the industry, are now 
generally accepted as the best solution of the problem. 

Automatically, an industry too costly in its human toll to be supported 
by the community ceases to exist. Automatically, competitive conditions 
force a decrease in the overhead charge of human misery in a plant 
operated recklessly or without proper safeguarding of health. 

Safety appliance laws may be difficult to pass and to enforce but a 
law whereby a dangerous machine is certain to be an expensive machine 
is itself a safety appliance law of great efficiency. The cost of wire 
netting over a whirring wheel, or of boxing around a swift belt is a 
trifle compared to the cost of paying reasonable and sure compensation 
to the one injured by such neglect. 

Of course employer’s liability exists prior to the passage of compen- 
sation laws, but employer’s liability has offered the employer a gamble 
instead of a certainty. The fellow-servant rule, the doctrine of assumed 
risk, the various technical difficulties in proving negligence, to say nothing 
of the expense and delay in legal proceeding have all encouraged the 
employer “to take a chance,” or, when the employer resorted to liability 
insurance, have permitted the insurance companies to fix rates for profits 

25 


on the absurdities and partialities of the law. This consideration leads 
naturally to the second great service of compensation laws, the practical 
elimination of middleman profits in the adjustment of a loss. 

Where a claim must be litigated, the claimant who receives 50% 
of the amount which the employer pays may be regarded as fortunate. 
Two illustrations may make this plain. 

A typical case is given in Senate Document 13 1, 63rd Congress, 1st 
session : 

Accident Railroad engineer killed 

Dependents Widow and three children 

Time of litigation Three years 

Amount of judgment $10,000. 

Additional cost to Railroad 2,500 

Cost to the State (Judge, jury, etc.) 525 

Total $13,125 

Received by widow (50% of judgment) 5, 000 

Cost to Railroad and State to transfer $5,000 from 

Railroad to the widow $8,125 

(It should be noted that as the widow probably paid the costs. 

of the proceedings, records, briefs, etc., she probably received much 

less than $5,000, while her loss of three years’ interest alone was 

$450.00.) 

The report of the Legislative Committee in Wisconsin (1911) on 
Workmen’s Compensation shows the following waste of money in acci- 
dent insurance. For convenience the transfer of $1,000 is shown. 

1904. 1908. 

Paid by employers to insurance companies. $1,000.00 $1,000.00 

Paid by insurance companies to injured 

employees 290.00 500.00 

Expense for employees in litigation 116.00 200.00 

Net amount received for injuries $ 174.00 $ 300.00 

These figures mean that under best conditions the injured employee 
received only $300 of $1,000 paid by the employer, $700 being paid to 
those who transferred the money. Under worst conditions it cost the 
employer $1,000 to pay his injured employee $174; $826 being paid to 
the middlemen. 

In a large measure State legislation is required to carry out the prin- 
ciples of Workmen’s Compensation. But the Federal Government should 
do its part in the passage of two bills : 

A bill extending workmen’s compensation to all workmen engaged in 
interstate commerce. It is expected that a progressive measure to accom- 
plish this purpose will result from preparatory work now in progress. 

A bill extending workmen’s compensation to federal employees. This 
is the bill which is presented herewith. 

2 6 


Many of the considerations which are important to the discussion of 
private employment do not apply directly to government service and 
hence are not applicable to the bill introduced by Congressman Rupley. 
Yet it is of importance that the Government of the United States should 
set an example to private employers. The Government should be the first 
to fulfill obligations of social responsibility. The Government is a huge 
business. Its department heads may have the same tendencies toward 
false economy that private superintendents exhibit. Dangerous appli- 
ances, and unsanitary conditions may be permitted unless the inevitable 
costliness forces both the administrative and legislative officials to pro- 
vide safe and healthful conditions for labor. And delays and expense in 
proceedings to obtain compensation from the Government are as notori- 
ous as in litigations against private employers. So that in the main the 
accepted arguments for workmen’s compensation laws provide most sub- 
stantial reasons for the passage of the present bill. 

While this exposition has dealt largely with accidents it should be 
noted that the bill covers also occupational diseases, those disabilities 
whose cost is so obviously a proper charge upon the industry responsible. 

A special statement should be made regarding the drafting of this 
measure. It is in no sense a partisan document. The bill was drawn by 
Middleton Beaman of the Legislative Drafting Bureau at Columbia 
University at the request of the American Association for Labor Legisla- 
tion. It was introduced in the Senate by Senator Kern, a Democrat and 
in the House by Congressman Rupley, a Progressive. It has the approval 
of the leading experts on this variety of legislation and is fully worthy of 
the support of all members of Congress and of the public, without regard 
to politics, occupation or previous condition of prejudice. 


THE REMEDY. 

(Summary of Kern-Rupley Bill prepared by its draftsman Middleton 

Beaman.) 

What Employees Granted Compensation. 

All civilian officers and employees of the United States except of 
the Panama Canal, Isthmian Canal Commission and Panama Railroad 
Company. (Panama is covered by a special statute.) 

For What Compensation is Granted. 

The bill provides compensation for disability lasting more than three 
days or death of an employee, resulting from personal injury sustained 
in the course of his employment, irrespective of accident, or from an 
occupational disease contracted in the course of his employment. It also 
provides compensation in case employee is suspended from work in order 
to prevent his disability from an occupational disease. 

No compensation is allowed if the injury is caused by the employee’s 
intention to bring about the injury or death of himself or of another. 

27 


Amount of Compensation — Disability Payments. 

Total disability: 66^3% of the monthly pay during the continuance 
of disability, not to exceed $66.67 a month, and not less than $33-33> 
unless employee’s monthly pay is less than $33.33, in which case compen- 
sation is full pay. 

Partial disability: 66^3% of the difference between the monthly pay 
at the time of the injury and the monthly wage-earning capacity after the 
beginning of the partial disability, not to exceed $66.67 per month. If 
the employee refuses to work after suitable work is furnished to or 
secured for him by United States, no compensation is allowed while the 
refusal continues. 

No compensation for first three days of disability. 

If employee has unused annual or sick leave he may, subject to 
approval of head of department, substitute it for compensation until 
used up. 

Transportation o^ injured employee to his home or place of residence 
or place where he reported for work (in discretion of administrative 
officials) . 

Medical, surgical and hospital services and supplies for a reasonable 
time and in a reasonable amount. 

Death Payments. 

To the widow, if no child, 35% of monthly pay of deceased employee 
until death or marriage. In case of marriage lump sum equal to three 
years’ compensation. 

To widower, if no child, 35% if wholly dependent and a proportion- 
ate amount if partly dependent, payable until death or marriage. 

To widow or widower, if there is a child, the above amounts and 
in addition 10% for each child not to exceed to total of 66 }^% for widow 
or widower and children. Compensation on account of any child ceases 
when he dies, marries or reaches eighteen or if over eighteen and 
incapable of self-support becomes capable of self-support. 

To the children, if no widow or widower, 25% for one child and 
\o°/o additional for each additional child not to exceed a total of 66^3%. 
Compensation of each child ceases when he dies, marries or reaches 
eighteen, or if over eighteen and incapable of self-support becomes 
capable of self-support. 

To the parents, 25% for one wholly dependent and 40% if' both 
wholly dependent. Proportionate amount if partly dependent. These 
percentages paid if no widow, widower or child. If there is a widow, 
widower or child, parents receive so much of these percentages as when 
added to total percentages payable to widow, widower and children will 
not exceed total of 66^3%. 

To brothers and sisters, grandparents and grandchildren 20% if one 
wholly dependent and 30% if more than one. If no one wholly depend- 
ent and one or more partly dependent 10% divided share and share alike. 
These percentages paid if no widow, widower, child or dependent parent 
If there is a widow, widower or child or dependent parent there shall be 
paid so much of these percentages as when added to total percentages 


payable to widow, widower, children and dependent parent will not exceed 
total of 66%%. 

Payments to last two classes continue for eight years from the time 
of the death of the injured employee unless before that time the benefi- 
ciary dies, marries, or ceases to be dependent or reaches eighteen or if 
over eighteen and incapable of self-support becomes capable of self- 
support. 

In computing compensation in case of death, the monthly pay of the 
injured employee shall be considered not to be more than $100 nor less 
than $50 but total monthly death payments shall not exceed the actual 
monthly pay of the employee. 

Burial expenses up to $100 and transportation of body to home in 
discretion of administrative officials. 

Commutation Into Lump Sum. 

In case of death or permanent disability, administrative officials may 
commute periodical payments into a lump sum equal to two-thirds of all 
future payments if the beneficiary is or is about to become a non-resident 
of the United States or it is for the best interests of the beneficiary. In 
estimating such lump sum, the probability of the beneficiary’s death shall 
be determined according to mortality tables but the probability of the 
happening of any other contingency shall be disregarded. 

Notice of Injury. 

No liability for compensation unless written notice within 48 hours 
after the injury or death unless the administrative officials find reasonable 
cause for notice given later. 

Claim for Compensation. 

No compensation allowed to any person unless he makes a claim 
within sixty days after the beginning of disability or within one year after 
the death but administrative officials may for reasonable cause allow claim 
to be filed later. Claim must be made on forms furnished by administra- 
tive officials, must contain all information required by them, and must be 
sworn to. 

Medical Examination. 

Injured employee required to submit to medical examination at 
request of administrative officials and no compensation payable so long 
as refusal to submit to examination continues. 

If employee, about to enter service in connection with work in which 
he would be subject to the risk of contracting an occupational disease, 
discloses on examination symptoms of such disease or physical condition 
rendering him likely to contract such disease, he shall not be appointed 
to any position connected with such work. 

Any employee performing any work which subjects him to risk of 
contracting an occupational disease shall be examined from time to time 
and if he is found to have an occupational disease he may, although not 
disabled, be suspended from work and paid compensation as for total 
disability. 


29 


Third Person’s Liability. 

If the injury or death for which compensation is payable is caused 
by the negligence of some person other than the United States and 1 a 
beneficiary entitled to compensation pursues his right of action against 
such other person, he is required to credit upon compensation due from 
the United States the amount received from such other person. 

Administrative Features of Bill. 

The Bill provides for a commission, composed of three commissioners 
appointed by the President with the advice and consent of the Senate at 
a salary of $5,000 each, and with such assistants as Congress may from 
time to time provide to be appointed by the commission solely with regard 
to fitness to perform their duties. 

The commission is authorized to make necessary rules and regula- 
tions for the enforcement of the act and to decide all questions arising 
under the act. The commission is to submit a report annually to Con- 
gress and is to submit annually to the Secretary of the Treasury esti- 
mates of the appropriations needed 

Funds for Payment of Compensation. 

The Bill establishes a separate fund in the Treasury to be known as 
the Employees’ Compensation Fund. The Bill appropriates $800,000 to 
establish this fund and provides that there shall be added to it such sums 
as Congress may from time to time appropriate. The commission is to 
submit annually to the Secretary of the Treasury estimates of appropria- 
tions needed for the maintenance of the fund. 

Prevention of Accidents and Occupational Diseases. 

The commission is required to study the causes of accidents and 
occupational diseases among civilian employees of the government, to 
report annually to Congress the results of its investigations, and to make 
such recommendations as it may deem proper to the various depart- 
ments as to the best means of preventing accidents and occupational 
diseases. 


A BILL. 

To Provide Compensation for Employees of the United States Suffering In- 
juries or Occupational Diseases in the Course of Their Employment, 
and for Other Purposes. 

Be it enacted by the Senate and House of Representatives of the United States 
of America in Congress assembled, That the United States shall pay compensation 
as hereinafter specified for the disability or death of an employee resulting from a 
personal injury sustained in the course of his employment, and for the disability, 
death, or suspension from work of an employee resulting from an occupational 
disease contracted in the course of his employment ; but no compensation shall be 
paid if the inju-ry, death, or occupational disease is caused by the employee’s 
intention to bring about the injury or death of himself or. of another. 

Sec. 2. That during the first three days of disability the employee shall not 
be entitled to compensation, except as provided in section ten. No compensation 
shall at any time be paid for such period. 


30 


Sec. if the disability is total the United States shall pay to the dis- 

abled employee during such disability a monthly compensation equal to sixty-six and 
two-thirds per centum of his monthly pay. 

Sec. 4. That if the disability is partial the United States shall pay to the dis- 
abled employee during such disability a monthly compensation equal to sixty-six 
and two-thirds per centum of the difference between his monthly pay and his 
monthly wage-earning capacity after the beginning of such partial disability. The 
commission may, from time to time, require a partially disabled employee to make 
an affidavit as to the wages which he is then receiving. In such affidavit the 
employee shall include a statement of the value of housing, board, lodging, and 
other advantages which are received from the employer as a part of his remunera- 
tion and which can be estimated in money. If the employee, when required, fails 
to make such affidavit he shall not be entitled to any compensation while such failure 
continues, and the period of such failure shall be deducted from the period during 
which compensation is payable to him. 

Sec. 5. That if a partially disabled employee refuses to work after suitable 
work is furnished to or secured for him by the United States he shall not be 
entitled to any compensation while such refusal continues, and the period of such 
refusal shall be deducted from the period, during which compensation is payable to 
him. 

Sec. 6. That if, as a result of any physical examination authorized by section 
twenty-five, any employee is found to have contracted any occupational disease, he 
may, in the discretion of the commission, although not disabled, be suspended from 
work until such time as, in the opinion of the commission, it is safe for him to 
return to work. During such suspension the United States, if he has contracted the 
disease in the course of his employment, shall pay to him a monthly compensation 
equal to sixty-six and two-thirds per centum of his monthly pay. If, after the 
expiration of a reasonable time, it is decided by the commission that his return 
to his regular work would probably result in his disability from such disease, he 
shall be considered as disabled, and thereafter the United States, if he has con- 
tracted the disease in the course of his employment, shall pay to him compensation 
as for total or partial disability, as the case may be. 

Sec. 7. That the monthly compensation for total disability or for suspension 
from work shall not be more than $66.67 nor less than $33.33, unless- the employee’s 
monthly pay is less than $33.33, in which case his monthly compensation shall be 
the full amount of his monthly pay. The monthly compensation for partial dis- 
ability shall not be more than $66.67. 

Sec. 8. That as long as the employee is in receipt of compensation under this 
Act, or, if he has been paid a lump sum in commutation of installment payments, 
until the expiration of the period during which such installment payments would 
have continued, he shall not receive from the United States any salary, pay, or 
remuneration whatsoever except in return for services actually performed. 

Sec. 9. That if at the time the disability or suspension from work begins 
the employee has annual or sick leave to his credit, he may, subject to the approval 
of the head of the department, use such leave until it is exhausted, in which case his 
compensation shall, in the case of suspension from work, begin immediately after 
the annual or sick leave has ceased, and in the case of disability begin on the fourth 
day of disability after the annual or sick leave has ceased. 

Sec. 10. That immediately after an injury sustained by an employee in the 
course of his employment, whether or not disability has arisen, and for a reasonable 
time thereafter, and immediately after the beginning of disability or of suspension 
from work due to an occupational disease contracted by an employee in the course 
of his employment, and for a reasonable time thereafter, the United States, when- 
ever practicable, shall furnish to such employee reasonable medical, surgical, and 
hospital services and supplies unless he refuses to accept them. Such services and 
supplies shall be furnished by United States medical officers and hospitals, but 
where this is not practicable shall be furnished by private physicians and hospitals 
designated or approved by the commission and paid for from the employees’ com- 
pensation fund. 

Sec. 11. That if at the time of the beginning of the disability the employee 
is away from his home or usual place of residence, the United States shall, in the 
discretion of the commission, furnish him transportation thereto or to the place 
where he reported for work, if such home or place is within the United States. 

31 


Sec. 12 . That if death results from the injury or from the occupational dis- 
ease within six years after the injury or the beginning of disability or suspension 
from work due to such disease, the United States shall pay to the following persons 
for the following periods a monthly compensation equal to the following percent- 
ages of the deceased employee’s monthly pay : 

(A) To the widow, if there is no child, thirty-five per centum. This com- 
pensation shall be paid until her death or marriage. In case of marriage, there 
shall be paid to her a lump sum equal to thirty-six months’ compensation. 

(B) To the widower, if there is no child, thirty-five per centum if wholly de- 
pendent for support upon the deceased employee at the time of her death, and such 
proportionate amount as the commission deems proper if partly dependent. This 
compensation shall be paid until his death or marriage. 

(C) To the widow or widower, if there is a child, the compensation payable 
under clause (A) or clause (B) and in addition thereto ten per centum for each 
child, not to exceed a total of sixty-six and two-thirds per centum for such widow 
or widower and children. The compensation payable on account of any child shall 
cease when he dies, marries, or reaches the age of eighteen, or, if over eighteen, 
and incapable of self-support, becomes capable of self-support. 

(D) To the children, if there is no widow or widower, twenty-five per centum 
for one child and ten per centum additional for each additional child, not to exceed 
a total of sixty-six and two-thirds per centum, divided among such children, share 
and share alike. The compensation of each child shall be paid until he dies, marries, 
or reaches the age of eighteen, or, if over eighteen and incapable of self-support, 
becomes capable of self-support. The compensation of a child under legal age 
shall be paid to its guardian. 

(E) To the parents, if one is wholly dependent for support upon the deceased 
employee at the time of his death and the other is not dependent to any extent, 
twenty-five per centum ; if both are wholly dependent, twenty per centum to each ; 
if one is or both are partly dependent, a proportionate amount in the discretion of 
the commission. 

The above percentages shall be paid if there is no widow, widower, or child. 
If there is a widow, widower, or child, there shall be paid so much of the above 
percentages as, when added to the total percentages payable to the widow, widower, 
and children, will not exceed a total of sixty-six and two-thirds per centum. 

(F) To the brothers, sisters, grandparents, and grandchildren, if one is wholly 
dependent upon the deceased employee for support at the time of his death, twenty 
per centum; if more than one are wholly dependent, thirty per centum, divided 
among them share and share alike; if there is no one of them wholly dependent, 
but one or more partly dependent, ten per centum divided among them share and 
share alike. 

The above percentages shall be paid if there is no widow, widower, child, or 
dependent parent. If there is a widow, widower, child, or dependent parent, there 
shall be paid so much of the above percentages as, when added to the total per- 
centage payable to the widow, widower, children, and dependent parents, will not 
exceed a total of sixty-six and two-thirds per centum. 

(G) The compensation of each beneficiary under clauses (E) and (F) shall 
be paid for a period of eight years from the time of the death, unless before that 
time he, if a parent or grandparent, dies, marries, or ceases to be dependent, or, 
if a brother, sister, or grandchild, dies, marries or reaches the age of eighteen, 
or, if over eighteen and incapable of self-support, becomes capable of self-support. 
The compensation of a brother, sister, or grandchild under legal age shall be paid 
to his or her guardian. 

(H) As used in this section, the term “child” includes stepchildren, adopted 
children, and posthumous children, but does not include married children. The 
terms “brother” and “sister” include stepbrothers and stepsisters, half brothers and 
half sisters, and brothers and sisters by adoption, but do not include married brothers 
or married sisters. All of the above terms and the term “grandchild” include only 
persons who at the time of the death of the deceased employee are under eighteen 
years of age or over that age and incapable of self-support. The term “parent” 
includes step-parents and parents by adoption. The term “widow” includes only 
the decedent’s wife living with or dependent for support upon him at the time of his 
death. The term “widower” includes only the decedent’s husband dependent for 
support upon her at the time of her death. 

32 


(I) Upon the cessation of compensation under this section to or on account 
of any person, the compensation of the remaining .persons entitled to compensation 

t^ii if unexpired part of the period during which their compensation is payable 
shall be that which such persons would have received if they had been the only 
persons entitled to compensation at the time of the decedent’s death. 

(J) In computing compensation under this section, the monthly pay shall be 
considered not to be more than $100 nor less than $50, but the total monthly 
compensation shall not exceed the monthly pay computed as provided in section 
fourteen. 

Sec. 13. That if death results from the injury or from the occupational disease 
within six years after the injury or the beginning of disability or suspension from 
work due to such disease, the United States shall pay to the personal representa- 
tive of the deceased employee burial expenses not to exceed $100, in the discretion 
of the commission. In the case of an employee whose home is within the United 
States, if his death. occurs away from his home office or outside of the United States, 
and if transportation has not been furnished the employee under section eleven 
before his death and if so desired by his relatives, the body shall, in the discretion 
of the commission, be embalmed and transported in a hermetically sealed casket 
to the home of the employee. 

Sec. 14. That “monthly pay” shall be computed as follows : 

(A) If the employee is paid by the year, divide his yearly pay at the time 
of the injury by twelve; 

(B) If the employee is paid by the mohth, take his monthly pay at the time 
of the injury; 

(C) If the employee is paid by the week, multiply his weekly pay at the time 
of the injury by fifty-two and divide the result by twelve; 

(D) If the employee is paid by the day, multiply his daily pay at the time of 
the injury by twenty-six; 

(E) If the employee is paid by the hour, multiply his hourly pay at the time of 
the injury by the number of hours constituting a day’s work and multiply the result 
by twenty-six ; 

(F) If the employee is paid by his output, find his hourly pay at the time of ‘ 
the injury by dividing the total amount earned by him in the employment in which 
and at the rate of pay at which he was employed at the time of the injury, during 
so much of the thirty days next preceding the injury, including the day of the injury, 
as he was so employed, by the number of Ijours so employed during such thirty 
days then proceed as in (E) ; but if it is impossible to find such hourly pay by this 
method, the monthly pay of the employee shall be considered to be the average 
amount earned per month by employees at the same rate of pay in the same or 
most similar grade, employment, or locality; 

(G) In making the computation provided in clauses (E) and (F) of this 
section, overtime shall not be taken into account; 

(H) Subsistence and the value of quarters shall be included as part of the 

pay; 

(I) If the disability or suspension from work is due to an occupational disease 
the term “injury,” as used in this section, shall mean : 

.(a) The time of the beginning of any disability or suspension from work due 
to such disease, or 

(b) If at such time the employee is not in the service of the United States, the 
time of leaving such service. 

Sec. 15. That in the determination of the employee’s monthly wage-earning 
capacity after the beginning of partial disability, the value of housing, board, 
lodging, and other advantages which are received from his employer as a part of 
his remuneration and which can be estimated in money shall be taken into account. 

Sec. 16. That in cases of death or of permanent total or permanent partial 
disability, if the monthly payment to the beneficiary is less than $5 a month, or if 
the beneficiary is or is about to become a non-resident of the United States, or if 
the commission determines that it is for the best interests of the beneficiary, the 
liability of the United States for compensation to such beneficiary may be discharged 
by the payment of a lump sum equal to two-thirds of all future payments of com- 
pensation. The probability of the beneficiary’s death before the expiration of the 
period during which he is entitled to compensation shall be determined according 
to the National Fraternal Congress table; but' in case of compensation to the 


33 


widow or widower of the deceased employee, such lump sum shall not exceed 
sixty months’ compensation. The probability of the happening of any other con- 
tingency affecting the amount or duration of the compensation shall be disregarded. 

Sec. 17. That every employee injured in the course of his employment, or 
some one on his behalf, shall, within forty-eight hours after the injury, give written 
notice thereof to the immediate superior of the employee. Such notice shall be 
given by delivering it personally or by depositing it, properly stamped and addressed, 
in the mail. 

Sec. 18. That the notice shall state the name and address of the employee, 
the year, month, day, and hour when and the particular locality where the injury 
occurred, and the cause and nature of the injury, and shall be signed by and contain 
the address of the person giving the notice. 

Sec. 19. That unless notice is given within the time specified or unless the 
immediate superior has actual knowledge of the injury, no compensation shall be 
allowed, but for any reasonable cause shown the commission may allow compensa- 
tion if the notice is filed within one year after the injury. 

Sec. 20. That no compensation under this Act shall be allowed to any person 
unless he or some one on his behalf shall, within the time specified in section 
twenty-two, make a written claim therefor. Such claim shall be made by deliver- 
ing it at the office of the commission or to any commissioner or to any person 
whom the commission may by regulation designate, or by depositing it in the 
mail properly stamped and addressed to the commission or to any person whom 
the commission may by regulation designate. 

Sec. 21. That every claim shall be made on forms to be furnished by the 
commission and shall contain all the information required by the commission. 
Each claim shall be sworn to by the person entitled to compensation or by the 
person acting on his behalf, and, except in case of death, shall be accompanied by a 
certificate of the employee’s physician stating the nature of the injury or disease 
and the nature and probable extent of the disability. 

Sec. 22. That all claims for compensation for disability resulting from injury 
shall be made within sixty days after the injur}'. All claims for compensation for 
'disability or suspension from work resulting from occupational disease shall be 
made within sixty days after the beginning of the disability or suspension. All 
claims for compensation for death shall be made within one year after the death. 
For any reasonable cause shown the commission may allow claims for compensa- 
tion for disability resulting from injury or occupational disease to be made at 
any time within one year. 

Sec. 23. That the immediate superior of the employee or the commission, as 
the case may be, may, within ten days after receipt of a notice or claim, demand 
a further notice or claim, specifying in the demand in what particular the notice 
or claim is defective. Failure to make such demand shall constitute a waiver by 
the United States of all defects which the notice or claim may contain. After 
receipt of such demand, the person giving the notice or making the claim may, at 
any time within ten days, give an amended notice or make an amended claim, which 
shall supersede the first notice or claim and have the same effect as an original 
notice or claim. 

Sec. 24. That any person seeking to enter the service of the United States in 
or about any work or process in which he would be subject to the risk of contract- 
ing an occupational disease shall, if so requested by the commission, submit him- 
self, at a reasonable time and place, to examination, by a medical officer of the 
United States, or by a duly qualified physician designated or approved by the 
commission. If, in the opinion of the examining physician, such person exhibits 
symptoms of an occupational disease, or by reason of his physical condition is 
peculiarly likely to contract an occupational disease, the physician shall so certify to 
the appointing officer, who shall refuse to appoint such person to any position in or 
about such work or process. 

Sec. 25. That any employee employed in or about any work or process in 
which he is subject to the risk of contracting an occupational disease shall, from 
time to time, if so ordered by the commission, submit himself to examination by a 
medical officer of the United States or by a duly qualified physician designated or 
approved by the commission, for the purpose of determining whether or not he has 
.contracted such disease. 

Sec. 26, That, after the injury or after disability or suspension from work on 


34 


account of an occupational disease the employee shall, as frequently and at such 
times and places as may be reasonably required, submit himself to examination by 
a medical officer of the United States or by a duly qualified physician designated or 
approved by the commission. The employee may have a duly qualified physician 
designated and paid by him present to participate in such examination. For all 
examinations after the first the employee shall, in the discretion of the commis- 
sion, be paid his reasonable traveling and other expenses and loss of wages incurred 
in order to submit to such examination. If the employee refuses to submit himself 
for or in any way obstructs any examination, his right to claim compensation under 
this Act shall be suspended until such refusal or obstruction ceases. No compen- 
sation shall be payable while such refusal or obstruction continues, and the period 
of such refusal or obstruction shall be deducted from the period for which com- 
pensation is payable to him. 

Sec.. 27. That in case of any disagreement between the physician making an 
examination on the part of the United States and the employee’s physician the com- 
mission shall appoint a third physician, duly qualified, who shall make an exam- 
ination. The decision of the majority shall be final. 

Sec. 28. That fees for examinations made on the part of the United States 
under sections twenty-four, twenty-five, twenty-six, and twenty-seven by physicians 
who. are not already in the service of the United States shall be fixed by the com- 
mission. Such fees, and any sum payable to the employee under section twenty-six, 
shall be paid out of the appropriation for the work of the commission. 

Sec. .29. That immediately after an injury to an employee resulting in his 
death or in his probable disability, his immediate superior shall at once make a 
report to the commission containing such information as the commission may 
require, and shall thereafter make such supplementary reports as the commission 
may require. 

Sec. 30. That no claims for compensation under this Act shall be assignable, 
and all compensation and claims therefor shall be exempt from all claims of 
creditors. 

Sec. 31. That no claim for legal services in connection with any claim arising 
under this Act shall be enforceable unless approved by the commission. 

Sec. 32. That if an injury or death for which compensation is payable under 
this Act is caused under circumstances creating a legal liability in some person other 
than the United States to pay damages therefor, and a beneficiary entitled to com- 
pensation from the United States for such injury or death receives, as a result of a 
suit brought by him or on his behalf, or as a result of a settlement made by him or 
on his behalf, any money or other property in satisfaction of the liability of such 
other person, such beneficiary shall, after deducting the costs of suit and a rea- 
sonable attorney’s fee, apply the money or other property so received in the fol- 
lowing manner : 

(A) If his compensation has been paid in whole or in part, he shall refund 
to the United States the amount of compensation which has been paid by the 
United States and credit any surplus upon future payments of compensation pay- 
able to him. 

(B) But if no compensation has been paid to him by the United States, he 
shall credit the money or other property so received upon any compensation payable 
to him by the United States. 

Sec. 33. That a commission is hereby created, to be known as the United 
States Employee’s Compensation Commission, and to be composed of three com- 
missioners appointed by the President, with the advice and consent of the Senate, 
one of whom shall be designated by the President as chairman. No commissioner 
shall hold any other office or position under the United States. Each commissioner 
shall hold office until his successor is appointed and has qualified.. Any vacancy 
occurring shall be filled in the same manner as an original, appointment. Each 
commissioner shall receive a salary of $5, 000 a year. A majority of the commission 
shall constitute a quorum for the exercise of any of its powers and duties, and an 
award by a majority shall be valid. 

Sec. 34. That the commission, or any commissioner by authority of the com- 
mission, shall have power to issue subpoenas for and compel the attendance of wit- 
nesses, to require the production of books, papers, documents, and other evidence, 
to administer oaths, and to examine witnesses. 

Sec. 35. That the commission shall have such assistants as may be from time 


to time provided by Congress. They shall be appointed by the commission without 
regard to party affiliation and solely with regard to their fitness to perform their 
duties. The commission shall designate one assistant, who, if any commissioner is 
absent or unable to perform his duties, shall act for him during such absence or 
inability, and who, if^ there is a vacancy in the office of any commissioner, shall act 
as commissioner until the vacancy is filled. 

Sec. 36. That the commission shall submit annually to the Secretary of the 
Treasury estimates of the appropriations necessary for the work of the commission. 

Sec. 37. That the commission is authorized to make necessary rules and 
regulations for the enforcement of this Act, and shall decide all questions arising 
under this Act. 

Sec. 38. That the commission shall study the causes of accidents and occupa- 
tional diseases among the employees covered by this Act, and shall from time to 
time make such recommendations as it may deem proper to the various depart- 
ments as to the best means of preventing such accidents and occupational diseases. 

Sec. 39. That the commission shall make to Congress at the beginning of each 
regular session a report of its work for the preceding fiscal year, including a 
detailed statement of appropriations and expenditures, a detailed statement showing 
expenditures from the employees’ compensation fund, and its recommendations for 
legislation. 

Sec. 40. That for the remainder of the fiscal year ended June thirtieth, nine- 
teen hundred and thirteen, and for the fiscal year ending June thirtieth, nineteen 
hundred and fourteen, there is hereby appropriated, from any money in the Treas- 
ury not otherwise appropriated, the sum of $50,000 for the work of the commission, 
including salaries and traveling expenses, rent and equipment of offices, purchase of 
books, stationery, and other supplies, printing and binding, to be done at the Gov- 
ernment Printing Office, and other necessary expenses. 

Sec. 41. That there is hereby appropriated, from any money in the Treasury 
not otherwise appropriated, the sum of $800,000, to be set aside as a separate fund 
in the Treasury, to be known as the employees’ compensation fund. To this fund 
there shall be added such sums as Congress may from time to time appropriate for 
the purpose. The commission shall submit annually to the Secretary of the Treas- 
ury estimates of the appropriations necessary for the maintenance of the fund. 

Sec. 42. That compensation provided by this Act may be awarded by the com- 
mission upon the claim presented by the beneficiary and the report furnished by the 
immediate superior of the employee and upon such investigation as it may deem 
necessary to discover the facts. Compensation when awarded shall be paid from 
the employees’ compensation fund on the order of the commission or a majority 
thereof. . 

Sec. 43. That the commission may at any time review, and, in accordance 
with the facts found in such review, end, diminish, or increase any award of com- 
pensation previously made. 

Sec. 44. That if any compensation is paid under a mistake of law or of fact, 
the commission shall immediately cancel any award under which such compensation 
has been paid, and shall recover, as far as practicable, any amount which has been 
so paid. 

Sec. 45. That whoever makes, in any affidavit required under section four or 
in any claim for compensation, any statement, knowing it to be false, shall be guilty 
of perjury and shall be punished by a fine of not more than $2,000, or by imprison- 
ment for not more than one year, or by both such fine and imprisonment. 

Sec. 46. That wherever used in this Act — 

The singular includes the plural and the masculine includes the feminine and 
neuter. 

The term “employee” includes all civilian officers and employees of the United 
States, except officers and employees of, first, the Isthmian Canal Commission; 
second, the Panama Canal ; third, the 'Panama Railroad Company ; but includes 
no others. 

The term “commission” shall be taken to refer to the United States Employees’ 
Compensation Commission provided for in section thirty-three. 

The term “department” includes the executive departments whose heads are 
members of the President’s Cabinet, and all independent offices, bureaus, boards, or 
commissions. 

The term “physician” includes surgeons. 


Sec. 47. That all Acts or parts of Acts inconsistent with this Act are hereby- 
repealed : Provided, however , That for injuries occurring prior to July first, nine- 
teen hundred and thirteen, compensation shall be paid under the law in force at the 
time of the passage of this Act. 

Sec. 48. That sections twenty-four, twenty-eight, thirty-three to forty, both 
inclusive, forty-six, and forty-eight of this Act shall take effect immediately upon 
its passage. The remainder of the Act shall take effect on July first, nineteen hun- 
dred and thirteen, but shall not apply to disability or death resulting from an in- 
jury sustained prior to July first, nineteen hundred and thirteen, or to disability, 
suspension from work, or death resulting prior to July first, nineteen hundred and 
thirteen, from an occupational disease. 



Eight Hour Day for Women in the 
District of Columbia 


THE PLEDGE. 

“The supreme duty of the nation is the conserva- 
tion of human resources through an enlightened meas- 
ure of social and industrial justice. We pledge 
ourselves to work unceasingly in state and nation for:— 

❖ * * * . * 

the establishment of an eight-hour day for women and 
young persons.” 

— Progressive National Platform. 


THE FULFILMENT. 

H. R. 6210. Introduced by Representative John I. Nolan of Cali- 
fornia, June 20, 1913. Referred to the Committee on the District of 
Columbia. 

NOTE: — Several months after the introduction of the Pro- 
gressive Bill a similar measure was passed by Congress and 
approved by the President. This Progressive proposal is there- 
fore omitted from this pamphlet. 


39 









































































































v. 

















■ 





■ 

* 
















































































- 















• 



















































- 




. 
















... 





























































Commission on Social Insurance 


THE PLEDGE. 

“The supreme duty of the nation is the conserva- 
tion of human resources through an enlightened 
measure of social and industrial justice. We pledge 
ourselves to work unceasingly in state and nation for: — 

“The protection of home life against the hazards 
of sickness, irregular employment and old age through 
the adoption of a system of social insurance adapted to 
American use.” 

— Progressive National Platform. 


THE FULFILMENT. 

H. R. 5696. Introduced by Representative M. Clyde Kelly of 
Pennsylvania, May 29, 1913. Referred to the Committee on Appro- 
priations. 


4i 











Commission on Social Insurance 


THE NEED. 

Following his introduction of this Bill, Congressman Kelly deliv- 
ered in the House on August 1st, an illuminating speech on the need of 
Government investigation. He said: 

“The business and industrial interests of this country have 
realized the importance of the problem of waste of material, and in 
recent years the desire to prevent this waste has been the greatest 
aim of these interests. Establishments and corporations have ex- 
perimented long and at great expense, with the result that they are 
today making millions of dollars from the vast stores of materials 
which formerly went to waste and were counted of no value. 

“But American business and industry, while solving the problem 
of waste in materials, have forgotten the far greater problem of the 
waste of life. I do not mean to say that all business men and all 
leaders of industry have overlooked this vital question ; but taken 
in the whole, the dollar-and-cent issue back of the conservation of 
materials has blinded business and industry to everything save the 
fact that human life is cheap and that the place left vacant by acci- 
dent or death or disease is quickly filled from the ranks of those who 
clamor for it. 

“Now, I want to lay down the proposition that viewed from a 
purely financial standpoint alone, the economic loss caused by sick- 
ness, invalidity, industrial accidents, and unemployment form the 
greatest drain today on the Nation’s resources, and that it is a 
matter of dollars and cents for every American citizen that this waste 
be prevented.” 

Taking up the various forms of industrial waste, Mr. Kelly laid 
the basis for the following estimates which probably are well below the 
true figures. Determining human values in terms of money, while pro- 
ducing startling figures, is at least an attempt to reduce emotional factors 
in the problem. 

Annual Losses in Human Resources. 


Accidents $350,000,000 

Sickness and Invalidity 1,000,000,000 

Unemployment 847,600,000 


$2,197,600,000 

These figures are of course highly speculative. There are no reli- 
able statistics upon which such estimates could be made. Considering, 
however, that available reports on accidents, disease and similar common 
hazards are necessarily incomplete and that Mr. Kelly utilized a fairly 


43 


conservative method of making his estimate on the modest basis of $10,000 
for the value of a life and $435 as the average annual income of the wage 
earner — his figures are not without value in helping to visualize the 
problem. The demand that a billion dollar congress should adequately 
investigate a possible annual waste of over two billion dollars of human 
resources should not be regarded as unreasonable. The very uncertainty 
in present statistics indicates the great need for a sweeping national in- 
vestigation. 

The objection may be raised that this loss cannot be prevented and 
that if it can be, schemes of social insurance are not preventives. There 
are two obvious answers to such objections. 

First. The establishment of various forms of Social Insurance 
whereby either the industry or society as a whole bears the burden of 
extravagance in the use of human resources, inevitably acts as a power- 
ful preventive of ' such waste. If any industry is required to pay for its 
wastage, the directors of that industry will reduce the amount of wastage 
to the lowest possible figure. 

Second. Regardless of whether systems of Social Insurance will 
act as preventives, they are methods of equitably distributing the losses 
of society. At the present time these losses fall most heavily upon those 
who are least fitted to bear them. There is a joint responsibility upon 
consumer, producer and laborer, or let us say, upon the State, the em- 
ployer and the employe, upon which an intelligent distribution of loss 
can be based. At the present time these losses fall in hap-hazard fashion. 
The injured or weak worker is the only one of the three interested parties 
who is absolutely certain to carry this burden and he is obviously the 
one least able to do so. 

Under the auspices of the American Association for Labor Legis- 
lation the first national conference on Social Insurance was held in 
Chicago in June, 1913. The main result of the conference was to point 
out most clearly that according to most authoritative opinion the great 
present need is for the investigation of the entire subject by the Govern- 
ment in order that the vastly scattered material and important statistics 
may be gathered and digested as a preparation for either the nation or 
the State adequately dealing with this nation-wide problem. An inter- 
national congress on Social Insurance will be held in Washington in 
1915, and a Federal Commission., appointed in the near future and en- 
tering energetically on its work, should be able to have prepared by that 
date material of incalculable value to aid in the deliberations of that body. 
The United States has lagged far behind the great nations of Europe in 
its attention to matters of social legislation; Our rapidly increasing prob- 
lems, owing to the steady concentration of population in our great cities 
and industrial centers, require that we should move forward speedily 
in our preparations to deal adequately with these questions. 

The purposes of the new Committee on Social Insurance appointed 
by the American Association for Labor Legislation as expressed in the 
Survey of March 15th, 1913, indicate the value of the proposed Com- 
mission in the following language: 

“Besides accident compensation, sickness insurance will receive 

much attention and the Committee will emphasize the fact that social 


44 


insurance is insurance for the masses, for those who would not 
otherwise be insured. In the words of a member of the Commit- 
tee, ‘we should inquire into the desirability of insurance against all 
emergencies of life of the working classes. When we classify the 
causes of poverty, zve enumerate the various kinds of insurance ! ” 

Mr. I. M. Rubinow, in his recent book, “Social Insurance,”* sum- 
marizes the need in the following language : 

“Here are some facts demanding sober consideration : 

“(i) From two-thirds to three-fourths of all productive workers 
in the United States depend upon wages or small salaries for their ex- 
istence. 

“(2) From four-fifths to nine-tenths of the wage-workers receive 
wages which are insufficient to meet the cost of a normal standard of 
health and efficiency for a family, and about one-half receive much less 
than that. 

“(3) If a certain proportion of wage-workers’ families succeed in 
attaining such a standard, it is made possible only by the presence of more 
than one worker in the family. 

“(4) This condition, however, can only be temporary in the history 
of any workingman’s family « 

“(5) The increase in the standard of wages is barely sufficient to 
meet the increased cost of living. 

“(6) An annual surplus in the workingman’s budget is a very rare 
thing, and is very small. 

“(7) The growth of savings bank deposits in the United States is 
not sufficient evidence of the ability of the American workingman to 
make substantial savings. A large proportion of these savings belong 
to other classes of population, and in so far as information is available, 
the average workingman’s deposit is very small. 

“(8) The analysis of the economic status of the American wage- 
worker does not disclose his ability to cope with the various economic 
emergencies without outside assistance. 

“It may be argued that all this evidence of the unsatisfactory eco- 
nomic condition of the working class, if correct, proves rather the neces- 
sity of a higher wage level than of a policy of social insurance. And it 
is surely not the intention of the writer to deny the necessity for higher 
wages. But this objection, often made, is based upon a misconception 
of the direct aims of social insurance. It does not deal with the normal 
standard of workingmen’s life, except indirectly, and in so far as the 
normal standard of wages and the standard of living depending upon 
wages are unsatisfactory, the corrective measures are much broader than 
anything social insurance can offer. 

“The direct object of social insurance is to protect this standard from 
the onslaught upon it by various physical and economic dangers, though 
it goes without saying that by this amount of protection the general 
standard is upheld and its improvement facilitated. But the economic 
and statistical evidence produced seems to force the conclusion, that if 
the general status of the wage-worker’s life is much below the standard 


*“Social Insurance,” by I. M. Rubinow; N. Y., Henry Holt & Co., 1913. 

45 


of physiological necessity and economic efficiency, surely the wage-worker 
is seldom in condition to withstand the attack of any cause which pro- 
duces an interruption of income. In other words, the condition exists 
which has been responsible for the growth of the social insurance move- 
ment in all industrial countries.” 

THE REMEDY. 

The proposed Commission on Social Insurance is to be composed 
of five members appointed by the President, serving for the modest com- 
pensation of $10 per day, and granted plenary powers of investigation 
into “the cost, operation and social value of voluntary, mutual and other 
forms of public and private insurance against accident, sickness, invalid- 
ity, old age, debt, unemployment and other disabilities and hazards in the 
common life of the v people, and the cost, operation and social value of 
related forms of public and private pensions.” 

The Commission is also to inquire into the nature and operation of 
foreign systems of insurance and pensions and into the extent of the 
need for such insurance in the United States. In the event of the recom- 
mendation of governmental action it is made the duty of the Commission 
to draft and submit with its final report tentative drafts of such a Bill 
or Bills as are deemed by the Commission necessary, suitable and suffici- 
ent to carry out its recommendations. 

The purpose of this provision it not to usurp in any way Legisla- 
tive functions, but in order that the Commission may make clear just 
what type of legislation even as to minor details would in its judgment 
support its recommendations. 


A BILL. 

To Create a Commission on Social Insurance 

Be it enacted by the Senate and House of Representatives of the United 
States of America in Congress assembled, That a commission is hereby created to 
be called the Commission on Social Insurance. Said commission shall be composed 
of five persons, to be appointed by the President of the United States, by and with 
the advice and consent of the Senate. The Departments of Commerce and Labor 
are authorized to cooperate with said commission in any manner and to whatever 
extent the Secretaries of Commerce and Labor may approve. 

Sec. 2. That the members of this commission shall be paid actual traveling 
and other necessary expenses and in addition a compensation of $10 per diem while 
actually engaged on the work of the commission and while going to or returning 
from such work. The commission is authorized as a whole, or by subcommittees of 
the commission, duly appointed, to hold sittings and public hearings anywhere in the 
United States, to send for persons and papers, to administer oaths, to summon and 
compel the attendance of witnesses and to compel testimony, and to employ such 
secretaries, experts, stenographers, and other assistants as shall be necessary to 
carry out the purposes for which such commission is created, and to rent such 
offices, to purchase such books, stationery, and other supplies, and to have such 
printing and binding done as may be necessary to carry out the purposes for which 
such commission is created, and to authorize its members or its employees to travel 
in or outside the United States on the business of the commission. In aid of its 
powers herein granted the commission shall be empowered to invoke the aid of any 
district court of the United States having jurisdiction in the district wherein said 
aid is required to enforce its orders, and jurisdiction is hereby granted to such dis- 
trict courts of the United States to issue, upon petition of the commission, the 

46 


necessary process and writs to carry out the orders of said commission and to 
compel obedience to the subpoenas of said commission or to compel testimony and 
production of documentary evidence in response to such subpoenas. 

Sec. 3. That said commission may report to the Congress its findings and 
recommendations and submit the testimony taken from time to time, and shall make 
a final report accompanied by the testimony not previously submitted not later than 
two years after the date of the approval of this Act, at which time the term of this 
commission shall expire, unless it shall previously have made final report, and in the 
latter case the term 0 f the commission shall expire with the making of its final 
report; and the commission shall make at least one report to the Congress within 
the first year of its appointment, and a second report within the second year of its 
appointment. 

Sec. 4. That the commission shall inquire into — 

The cost, operation, and social value of voluntary, mutual, and other forms of 
public and private insurance against accident, sickness, invalidity, old age, death, 
unemployment, and other disabilities and hazards in the common life of the people, 
and the cost, operation, and social value of related forms of public and private 
pensions. 

The extent of the need for such insurance in the United States and the possi- 
bilities- in constructive development of the same. 

The nature and operation of such systems of insurance or pensions as have 
been and are established in foreign countries and their adaptability to conditions and 
to use in the United States. 

Sec. 5. That the commission shall make recommendations in its final report 
concerning the desirability of establishing, either in the United States or in the 
several States or in both, a system or systems of social insurance as outlined above; 
and in the event that governmental action is recommended it shall be the duty of 
the commission to draft and submit with its final reports, tentative drafts of such a 
bill or bills as are deemed by the commission necessary, suitable, and sufficient to 
carry out its recommendations. 

Sec. 6. That the sum of $50,000 is hereby appropriated, out of any money in 
the Treasury of the United States not otherwise appropriated, for the use of the 
commission for the fiscal year ending June thirtieth, nineteen hundred and thirteen : 
Provided, That no portion of this money shall be paid except upon the order of said 
commission, signed by the chairman thereof. 


47 



Naturalization Commission 


THE PLEDGE. 

“We denounce the fatal policy of indifference and 
neglect which has left our enormous immigrant popula- 
tion to become the prey of chance and cupidity. 

“We favor governmental action to encourage the 
distribution of immigrants away from the congested 
cities, to rigidly supervise all private agencies dealing 
with them and to promote their assimilation, education 
and advancement.” 

— Progressive National Platform. 


THE FULFILMENT. 

H. R. 5819. Introduced by Representative Victor Murdock of Kan- 
sas, June 2, 1913. Referred to the Committee on Immigration and 
Naturalization. 


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Naturalization Commission 


THE NEED. 

The conflicting results of state legislation with reference to aliens 
and the inconsistent administration of the Federal naturalization laws 
by State courts, have created the need for a Federal Commission on 
-naturalization, as proposed in the bill introduced in the House by 
Congressman Victor Murdock. The presence in the United States 
of four million non-citizen males and over five million foreign born fe- 
males, shows the extent and importance of the problem. 

Although, by the constitution, the power was conferred upon Con- 
gress “to establish a uniform rule of naturalization throughout the United 
States”, Congress has as yet failed to fulfill all the obligations accompany- 
ing this grant of power. 

Defects in Administration Facilities. 

In the administration of the naturalization laws, Congress has in- 
voked the aid of State courts in such a manner as to make them, in a 
way, voluntary agents not definitely responsible nor committed by law 
to a uniform policy of administration. 2,277 State courts and 250 Fed- 
eral courts are exercising naturalization jurisdiction. The jurisdiction 
of the Federal courts necessarily covers large areas whereby attendance 
upon the court is exceedingly difficult and expensive for those living in 
distant parts of the district. Many of the State and Federal courts have 
little naturalization work to do, while others are over-crowded with this 
business. In the fiscal year ending June 30th, 1912, 65% of all the 
naturalization business of the country was transacted by 18% of the 
courts having facilities therefor. 

The important effect of the location of naturalization courts and their 
methods of administration upon the making of citizens is readily seen 
when one considers the requirements of the naturalization laws. An 
applicant must appear in court from four to eight times: 1. To file 
his declaration. 2. To file his petition. 3. For examination by the Bur- 
eau of Naturalization Examiner. 4. For hearing in open court. 5. To 
obtain a certificate, and often other times if his case is not reached upon 
the court call. At the time of filing his petition and upon final exami- 
nation, the petitioner must be accompanied by two citizen witnesses who 
have known him for five years. Therefore, if the court is at a distance 
from the petitioner’s residence, he must pay a round trip railroad fare 
for himself and two witnesses, at least two and possibly three or four 
times. In addition to this expense, the applicant also pays a fee of $1.00 
upon the declaration of intention and $4.00 upon filing of the petition. 
Also he must sacrifice his time for which the average wage earner is 

5i 


simply docked so many dollars and must persuade his witnesses to make 
a like sacrifice. As one earnest would-be citizen writes : 

“As far as I know, the papers cost only $5.00, which I would 
willingly pay, but adding $3.00 for every day I lose and say $3.00 
for each voucher (witness) per day, car fare, etc., would amount 
according to my figuring, to about $30.00 to $35.00, which is too much 
for the average working man to pay at this time of high cost of 
living.” 

All State courts having certain jurisdiction in matters of law and 
equity and the Federal courts, are granted jurisdiction in naturalization 
matters but this establishes courts without any regard for the needs of 
the alien population. These courts also naturally do not hold night 
sessions, whereby it is necessary for even the alien within easy distance 
to devote a large portion of several working days to obtaining citizenship. 
Again, although naturalization is a national matter, an applicant must 
reside at least one year within the State where petition is filed, which 
works a great hardship upon a large number of aliens who, on account 
of seasonal employment, make frequent changes of residence and who 
incidentally find it most difficult to find witnesses who have known them 
for five years. 

The fifty-five examiners of the Bureau of Naturalization are re- 
quired to examine every petition filed in any part of the United States 
and report their findings to the court. More speed can be obtained where 
the examiners attend court sessions, but it is obviously impossible for 
fifty-five examiners to attend upon the sessions of even the more import- 
ant of 2,527 courts exercising naturalization jurisdiction. 

The administrative difficulties inherent in such a system as now pre- 
vails, provide one reason why, out of 169,142 declarations filed for the 
fiscal year ending June 30th, 1912, only 95,627 petitions were filed and 
only 69,965 certificates issued. 

Lack of Educational Facilities. 

There is, however, a more deep seated weakness than administration 
in the naturalization methods, and that lies in the lack of definite and 
official provision for the preliminary education of aliens which must 
precede naturalization. A would-be citizen must be able to speak the 
English language and must be familiar with the constitution of the 
United States and have some general knowledge of civics. Yet, although 
the doors of the United States are wide open to immigrants and it is 
admittedly only desirable to encourage the entry of aliens in the expecta- 
tion that they will become citizens, nevertheless, that same Government 
which welcomes the foreign born, which looks upon him as a future 
citizen, makes no provision for his education in the language of the 
country or his understanding of its principles of government. 

In a few of the States, some of the larger cities have made pro- 
vision for night schools designed for the instruction of aliens in English, 
and in a few instances, in civics. For example, in thirty-one municipalities 
in New York State having such night schools, only two provide instruc- 
tion in civics, and out of twenty-eight municipalities in New Jersey, 
only two provide instruction in civics, and in both of these States there 


52 


is no co-ordination between this schooling and the work of naturalization. 
The State of California gives a unique example of co-ordination of 
schooling and naturalization. When an applicant files his petition, he 
is advised, in the city of Los Angeles, to attend the school provided, for 
a period of three months. In the greater part of the United States, how- 
ever, there is little provision for the would-be citizen to obtain instruc- 
tion in language or in principles of government. 

That some such provision is earnestly desired by aliens, is shown 
from the unfortunate success of various clubs organized for the private 
profit of unscrupulous persons pretending to give instruction and to 
insure naturalization to members. Of course, there are many private 
agencies of higher repute working upon this problem, but any adequate 
solution can only come from the National Government. The educational 
facilities at the disposal of the alien and their effectiveness, vary in im- 
portance to the alien, according to the particular court to which he must 
report to obtain his papers — a most unfortunate situation. Certain 
judges administer the law with great strictness requiring a high standard 
of ability to speak the language and a real understanding of govern- 
mental principles. In other courts the administration is distinctly lax 
and this inequality is a natural result of the lack of definite standards 
whereby an alien is entitled to citizenship and the lack of any definite 
governmental schooling to indicate what a court should regard as the 
essentials of knowledge to be possessed by the petitioner. 

Differing Rights of Aliens in Different States. 

When the legal status of aliens, their rights and disabilities under 
State laws and Municipal ordinances, are considered, the importance of 
uniform and efficient naturalization regulations becomes painfully evi- 
dent. Aliens are discriminated against in employment on public works 
in nine states and one territory, including Arizona, Massachusetts, New 
York, New Jersey, Louisiana, Pennsylvania, Wyoming, Idaho and Ala- 
bama (and also Hawaii). In many other States there are specific pro- 
visions limiting certain occupations to citizens. Discriminatory provis- 
ions are very frequent in muncipal regulations and ordinances. Licenses 
for certain occupations are denied to aliens in various cities. Laws affect- 
ing the alien’s right to work in certain States have been of such drastic 
character as to be held unconstitutional, as for example, in Idaho and 
Pennsylvania, In two States at least, of those having workmen’s com- 
pensation laws (New Hampshire and New Jersey), aliens are specifically 
excluded as beneficiaries. 

The alien’s right to own or lease real estate has been the subject 
of legislation in numerous States, and as in the recent Japanese imbroglio 
such laws constantly make imminent international controversy. 

Voting Rights of Aliens. 

i 

By far the most important question concerning the legal status of 
the four million resident alien males and five million foregn born resi- 
dent females, is involved in the laws governing the right to vote. In a 
majority of the States, the right to vote is a constitutional one, limited 
to citizens, but in eight States, Arkansas, Indiana, Michigan, Kansas, 


53 


Missouri, Nebraska, Texas and Oregon, an alien, upon filing his declar- 
ation of intention, is entitled to vote at all elections. The naturalization 
laws do not give the alien any political rights until actually admitted to 
citizenship, yet, the right to vote by these state laws is bestowed as a 
consequence of mere declaration of intention, although as previously 
pointed out, out of 169,141 declarations of the last fiscal year, only 69,- 
965 certificates resulted. 

As was well pointed out by the Commission on Naturalization in its 
report of November 8th, 1905, “The case may readily arise of the bal- 
ance of political power in the United States being lodged in foreigners 
owing no allegiance to the United States.” A very pertinent example 
comes from the national election of 1908 in Indiana which has usually 
been regarded in recent presidential elections, as a doubtful State. An 
increasingly large number of foreigners are employed there in the steel 
industry. It is significant that from July to October, 1908, 660 declar- 
ations were filed; from October to December (the period of presidential 
election), 6,697 declarations were filed, and from January to April of 
1909, only 71 declarations were filed. It is reasonable to assume that 
over 6,000 aliens declared intention for the principal purpose of voting 
at this presidential election. Those 6,000, who might never become citi- 
zens, might well determine the electoral vote of the State of Indiana, 
which in its turn might well determine the electoral vote of the nation. 
A similar result might take place in at least six of the eight states which 
permit a vote to follow a mere declaration of intention. 

In this connection, attention should be called to the fact that both 
the Commission of Naturalization of 1905 and the division of naturali- 
zation of the Department of Labor, have recommended the abolition of 
the declaration of intention, as it entails considerable unnecessary work, 
it may result in an abuse of political power and finally, since every peti- 
tioner must now file a certificate of arrival if he has arrived in the United 
States subsequent to June, 1906, his five years’ residence in this country 
is easily established. 

Women’s Citizenship and Suffrage. 

If the right of the male to vote is at present determined by standards 
quite insistent with our naturalization laws, the right of the female to 
vote may be said to be determined by practically no standards at all. 
Under the present laws, the naturalization of women follows that of 
husband and father. Resident American women may therefore be de- 
prived of their vote upon marriage to an alien. Foreign born women, 
and even most recently arrived immigrant women, may be immediately 
enfranchised by marriage to a citizen. Following this enfranchisement, 
her citizenship is retained even though she is divorced, if she continues 
to reside in the United States. 

Considering again the presence of five 1 million foreign born adult 
females in the United States and the rapidly increasing number of wo- 
man suffrage states, of which three are leading immigrant states, it is 
plain that some uniform and consistent standard for the naturalization 
of women must be adopted. It is also plain that the theory of a woman’s 
citizenship following that of husband and father is quite inconsistent 

54 


with the political and legal status of women in. other matters, in the 
United States. 

In this brief survey of the inconsistent and inharmonious state and 
national regulations of the right to citizenship and the rights of non- 
citizen residents, the most important fact must not be overlooked that this 
discord is not a necessary evil to be born for the protection of state 
rights of sovereignty. 

The power conferred upon Congress to establish a uniform rule of 
naturalization throughout the United States should be exercised for 
the benefit of all the people, in the same manner as the power of Congress 
to deal with the question of bankruptcy has been exercised in the aid 
of commercial harmony. Furthermore, the responsibility for the assimi- 
lation of the alien is definitely upon the Federal Government which con- 
trols immigration. That national power which admits the alien should 
guarantee to the states in which he must reside, that it will take all 
reasonable measures to insure his instruction in the essentials of citizen- 
ship. For the protection of the national government itself, provision 
should also be made that the political control of the nation may not be 
lodged in alien hands. 

How far in actual legislation, the Federal Government should extend 
its jurisdiction, how far provision for the instruction of aliens and pro- 
vision for ready naturalization of desirable would-be citizens should be 
under exclusive Federal control, or in what manner the states may uni- 
formly work toward a common end, co-ordinating their work with the 
Federal administration of naturalization laws — are all questions for 
which authoritive solution can only be expected from a Commisison of 
experts designated for the purpose of considering and working out a 
comprehensive program of legislative action for the benefit of both the 
native and foreign born citizen. 

THE REMEDY. 

The bill proposes to create a temporary commission of five mem- 
bers appointed by the President. These commissioners are to serve 
without pay as it is the theory of the proponents of the measure that men 
and women of unusual ability can be drafted into this particular work 
as an opportunity for genuine public service. 

The commission is given plenary powers of investigation and re- 
quired to make a report and to submit testimony taken within the year 
and a final report one year later at which time the commission will expire. 
The duties of the commission are set forth in Section 4 as 

“That said commission shall inquire into the conditions of admitted 
aliens within the several states with respect to facilities, methods, and 
opportunities for naturalization in the various State and Federal Courts, 
and the relation of such court procedure to the Federal bureaus of nat- 
uralization ; shall inquire into the educational preparation and oppor- 
tunities afforded in each state for such admitted aliens to comply with 
the provisions of the naturalization law ; and shall inquire into the status 
of aliens in the various states with respect to equality before the law, 
pursuance of occupations for a livlihood, acquirement and disposition 
of property, holding of public office, and voting; and such other condi- 

55 


tions concerning the naturalization of admitted aliens as affect the wel- 
fare and progress of this country.” 

The commission is directed to prepare tentative drafts of bills which 
it deems suitable to carry out its recommendations — not as in any way 
usurping legislative functions but in order to clarify recommendations 
made. 

A BILL. 

To Create a Commission on Naturalization 

Be it enacted by the Senate and House of Representatives of the United States 
of America in Congress assembled , That a commission is hereby created to be called 
the Commission on Naturalization. Said commission shall be composed of five 
persons, to be appointed by the President of the United States, by and with the 
advice and consent of the Senate. The Department of Commerce and other depart- 
ments concerned are authorized to cooperate with said commission in any manner 
and to whatever extent the Secretaries of said departments may approve. 

Sec. 2. That the members of this commission shall receive no compensation, 
but shall be paid actual traveling and other necessary expenses while actually 
engaged on the work of the commission and while going to or returning from such 
work. The commission is authorized as a whole, or by subcommittees of the com- 
mission, duly appointed, to hold sittings and public hearings anywhere in the United 
States, to send for persons and papers, to administer oaths, to summon and compel 
the attendance of witnesses and to compel testimony, and to employ such secretaries, 
experts, stenographers, and other assistants as shall be necessary to carry out the 
purposes for which such commission is created, and to rent such offices, to pur- 
chase such books, stationery, and other supplies, and to have such printing and 
binding done as may be necessary to carry out the purposes for which such com- 
mission is created, and to authorize its members or its employees to travel in the 
United States on the business of the commission. In aid of its powers herein 
granted, the commission shall be and is hereby empowered to invoke the aid of any 
district court of the United States having jurisdiction in the district wherein said 
aid is required to enforce its orders, and jurisdiction is hereby granted to such dis- 
trict courts of the United States to issue upon petition of the commission the neces- 
sary process and writs to carry out the orders of said commission and to compel 
obedience to the subpoenas of said commission or to compel testimony and pro- 
duction of documentary evidence in response to such subpoenas. 

Sec. 3. That said commission shall report to the Congress its findings and 
recommendations and submit testimony taken not later than January first, anno 
Domini nineteen hundred and fourteen, and make a final report not later than 
January first, anno Domini nineteen hundred and fifteen, at which time said com- 
mission shall expire. 

Sec. 4. That said commission shall inquire into the conditions of admitted 
aliens within the several States with respect to facilities, methods, and opportuni- 
ties for naturalization in the various State and Federal courts, and the relation of 
such court procedure to the Federal bureaus of naturalization ; shall inquire into the 
educational preparation and opportunities afforded in each State for such admitted 
aliens to comply with the provisions of the naturalization law; and shall inquire 
into the status of aliens in the various States with respect to equality before the 
law, pursuance of occupations for a livelihood, acquirement and disposition of prop- 
erty, holding of public office, and voting; and such other conditions concerning the 
naturalization of admitted aliens as affect the welfare and progress of this country. 

Sec. 5. That said commission shall make recommendations in its report con- 
cerning the matters herein referred to it, and in the event that governmental action 
is recommended it shall be the duty of the commission to draft and submit with its 
final reports tentative drafts of such a bill or bills as are deemed by the commission 
necessary, suitable, and sufficient to carry out its recommendations. 

Sec. 6. That the sum of $50,000 is hereby appropriated, out of any money in 
the Treasury of the United States not otherwise appropriated, for the use of the 
commission for the fiscal year ending June thirtieth, nineteen hundred and four- 
teen : Provided, That no portion of this money shall be paid except upon the order 
of said commission, signed by the chairman thereof. 

56 



National Rivers Commission 


THE PLEDGE. 

“The rivers of the United States are the natural 
arteries of this continent. We demand that they shall 
be opened to traffic as indispensable parts of a great 
nation-wide system of transportation in which the 
Panama Canal will be the central link, thus enabling 
the whole interior of the United States to share with the 
Atlantic and Pacific seaboards in the benefit derived 
from the canal. 

“It is a national obligation to develop our rivers, 
and especially the Mississippi and its tributaries, with- 
out delay, under a comprehensive general plan cover- 
ing each river system from its source to its mouth, 
designed to secure its highest usefulness for navigation, 
irrigation, domestic supply, water power and the pre- 
vention of floods. 

“We pledge our party to the immediate prepara- 
tion of such a plan, which should be made and carried 
out in close and friendly co-operation between the 
nation, the states and the cities affected. 

“Under such a plan, the destructive floods of the 
Mississippi and other streams, which represent vast and 
needless loss to the nation, would be controlled by 
forest conservation and water storage at the head- 
waters, and by levees below; land sufficient to support 
millions of people would be reclaimed from the deserts 
and the swamps, water power enough to transform the 
industrial standing of whole states would be developed, 
adequate water terminals would be provided, transpor- 
tation by river would revive, and the railroads would be 
compelled to co-operate as freely with the boat lines as 
with each other.” 

— Progressive National Platform. 


THE FULFILMENT. 

H. R. 6283. Introduced by Representative Henry W. Temple of 
Pennsylvania, June 21, 1913. Referred to the Committee on Rivers and 
Harbors. 


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National Rivers Commission 


THE NEED. 

Congressman Temple’s bill to create a National Rivers Commission 
is based on the fundamental conception that every river is a unit from 
its source to its mouth, and with that fact in mind should be developed 
so as to secure from it all of the services which it is capable of rendering 
to the people. In the past the rivers of the United States have usually 
been considered and treated, in each project for stream improvement, 
with reference to only one of the four great uses to which a river may 
be put. These uses are Domestic or Municipal Supply, Water Power, 
Irrigation, and Navigation. A single stream may, and often does, serve 
all four of them. 

It has, however, been the rule hitherto in the majority of the projects 
affecting our rivers, to disregard either one, two, or three of the four 
uses, and to concentrate on a comparatively narrow development instead 
of attempting to get from the stream the widest possible service to the 
community. Thus engineering works intended to improve navigation 
have been planned or located so as unnecessarily to limit or prevent the 
development of water power which could, without injury to navigation, 
have been developed at the same time. 

In the same way projects for the development of domestic supply 
and irrigation, as well as navigation and water power, have sacrificed, 
or have been sacrificed to, the development of the other uses simply for 
lack of a comprehensive outlook, or a comprehensive plan. 

The bill proposes to create a National Rivers Commission with the 
duty of preparing a plan based upon the harmonious development of all 
the uses of our streams and all the benefits to be derived from their 
control. 

This is the simple, direct, and business-like way in which to make 
sure that all the benefits and advantages, which lie latent in the river 
system of the United States, shall be made fully available for the use of 
our people. The value of such a plan has long been recognized by 
students of the subject, and the preparation of it must of necessity 
precede any general development of the rivers of the United States. 
This does not mean, however, that projects immediately necessary for 
protection against floods, or for any other immediate need of the people, 
shall be delayed pending the completion of such a plan. Indeed the bill 
specifically provides that they shall not be so delayed. It does require, 
on the other hand, that the general development of our river system 
shall proceed by a planned and orderly advance which shall make our 
streams useful to the people in the highest possible degree. 

The waste of effort which has marked our haphazard way of dealing 

59 


with our rivers is well illustrated by the fact that the river system of 
the United States, although unexcelled on any other continent, is less 
navigated and less navigable now than it was fifty years ago, in spite 
of the expenditures upon it of about a quarter of a billion dollars. The 
losses suffered by the people of this country from the failure to develop 
the water powers of our rivers, or their development and control by 
monopolists, amount to many millions of dollars every year. It is now 
proposed to replace the haphazard, unscientific, pork barrel methods of 
the past by the best plan which the best experts in this country can 
prepare, always without interference with the immediate execution of 
those projects which cannot wisely be deferred. 

THE REMEDY. 

The bill provides for the creation of a National Rivers Commission, 
so constituted as to include representatives of the many and varied inter- 
ests involved. The members of the Commission are to serve without pay, 
but an appropriation is provided for necessary expenses.. 

It is made the duty of the Commission to proceed forthwith “to gather, 
classify and analyze such information as it may deem necessary in order 
to prepare a comprehensive plan for the utilization and control of the 
rivers of the United States in such a manner as to yield the greatest 
practical benefit to all the people. Such plan shall be prepared as speedily 
as practicable and shall take account of all users of said rivers and benefits 
to be derived from their control, including among other matters naviga- 
tion, irrigation, water power, domestic and municipal water supply, flood 
prevention and control, stream pollution, soil erosidn, and terminals and 
co-operation between rail and river transportation.” 

It is further provided that the work of the Commission shall not 
interfere with immediate development of streams and that the Commis- 
sion shall invite the co-operation of all public officials concerned. 

The Commission is required to report to Congress at least once a 
year and at other times as it shall desire or be required to by Congress. 
The power to administer oaths and to compel the attendance and testi- 
mony of witnesses and the production of documentary evidence is given 
to the Commission, which is empowered to invoke the aid of the federal 
courts to enforce its orders. 


A BILL 

To Create a National Rivers Commission 

Be it enacted by the Senate and House of Representatives of the United States 
of America .in Congress assembled, That there is hereby established a National 
Rivers Commission which shall consist of -two members of the Senate to be ap- 
pointed by the President of the Senate, three Members of the House of Representa- 
tives to be appointed by the Speaker of the House, a member of the Interstate 
Commerce Commission to be appointed by the chairman thereof, the Chief of 
Engineers of the United States Army, the Commissioner of Corporations, the Chief 
of the United States Forest Service, the Director of the United States Geological 
Survey, the Director of the United States Reclamation Service, the Chief of the 
United States Weather Bureau, the president of the Lakes to the Gulf Deep Water- 
ways Association, the president of the National Rivers and Harbors Congress, the 
president of the National Conservation Association, the president of the Columbia 
River Improvement Association, the president of the Missouri River Improvement 

6o 


Association, and the governors of the several States, each of whom shall be ex-officio 
a member of said commission and entitled to act as in all matters in which his 
State is concerned. In case of vacancies in the commission caused by death or 
resignation or change in any office the holder whereof is by virtue of his office 
made a member of the commission the person herein given the power of appoint- 
ment shall have the power to fill any such vacancy. 

Sec. 2. That the commission shall perfect its organization by the election of 
a chairman, the election or employment of a secretary, and the election or appoint- 
ment of such subcommittees and chairmen thereof as from time to time it may 
deem wise. A majority of the existing members of the commission, exclusive of 
the governors of the several States, shall constitute a quorum for the transaction 
of business. 

Sec. 3. That the National Rivers Commission shall proceed forthwith to 
gather, classify, and analyze such information as it may deem necessary in order 
to prepare a comprehensive plan for the utilization and control of the rivers of the 
United States in. such manner as to yield the greatest practicable benefit to all the 
people. Such plan shall be prepared as speedily as practicable and shall take account 
of all users of said rivers and benefits to be derived from their control, including 
among other matters navigation, irrigation, water power, domestic and municipal 
water supply, flood prevention and control, stream pollution, soil erosion, and termi- 
nals and co-operation between rail and river transportation. 

Sec. 4. That nothing in this Act shall operate to prevent such immediate 
development of streams as the necessities of the people may require. 

Sec. 5. That it shall be the duty of the National Rivers Commission to invite 
the co-operation all State, municipal, and local officials and organizations within 
the scope of its work and in all practicable ways to co-operate with the same. 

Sec. 6. That the commission shall report to Congress upon the first Monday of 
December and at such other times as it may deem wise or as Congress may require. 
In any report by the commission recommending legislation by Congress or by one 
or more of the several States it shall be the duty of the commission to submit 
with such report tentative drafts of bills necessary to carry out the recommetlda- 
tions of the commission.. 

Sec. 7. That the commission shall have power to administer oaths and to re- 
quire by subpoena the attendance of witnesses and the production of books and 
papers, to make necessary investigations, and to secure from or through the various 
departments of the Government such information and assistance as may not be in- 
compatible with the duties laid upon such departments by law. In aid of its powers 
herein granted the National Rivers Commission shall be empowered to invoke the 
aid of any district court of the United States having jurisdiction in the district 
wherein said aid is required to enforce its orders; and jurisdiction is hereby granted 
to such district courts of the United States to issue upon petition of the National 
Rivers Commission the necessary processes and writs to carry out the orders and 
to compel obedience to the subpoenas of the said National Rivers Commission and 
to compel testimony in response to such subpoenas. 

Sec. 8. That the members of the National Rivers Commision shall receive 
no pay by reason of their services on said commission. 

Sec. 9. That the sum of $25,000 is hereby appropriated for all necessary ex- 
penses of the commission in the execution of this Act and as approved by the chair- 
man thereof for one year from and after the passage of this Act. The expendi- 
tures of this and subsequent appropriations shall be accounted for by the chairman 
of the commission in an account transmitted to Congress the first Monday of 
December of each year. 


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Amendment to the Constitution of the 
United States 

(Making Amendment Easier) 


THE PLEDGE. 

“The Progressive Party, believing that a free 
people should have the power from time to time to 
amend their fundamental law so as to adapt it pro- 
gressively to the changing needs of the people, pledges 
itself to provide a more easy and expeditious method of 
amending the federal constitution.” 

— Progressive National Platform. 


THE FULFILMENT. 

H. J. Res. 95. Introduced by Representative Walter M. Chandler 
of New York, June 10, 1913. Referred to the Committee on the Ju- 
diciary. 


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Amendment to the Constitution 


THE NEED. 

A few quotations from Bryce’s “American Commonwealth” will 
give a most authoritative expression to the need for an amendment to 
the Federal Constitution making amendment easier. 

“It is evident when one questions the nature of a rigid or supreme 
constitution that some method of altering it so as to make it conform to 
altered facts and ideas is indispensable, (v. i, p. 371.) 

In this chapter Mr. Bryce explains in great detail why, except under 
stress of civil war, the Constitution has not been amended in a hundred 
years. Fie points out, for example, that a “party amendment can very 
seldom be carried”, and that a non-party amendment is everybody’s 
business, and therefore nobody’s business. He also calls attention to 
the fact (page 369) that 

“If, therefore, comparatively little use has been made of the pro- 
vision for amendment, this has been due not solely to the excellence of 
the original instrument, but to the difficulties that surround the process 
of change.” 

Mr. Bryce considers at some length, the continual amendment of the 
Constitution which has been going on by indirect methods in the follow- 
ing language (page 373) : 

“Since modification or developments are often needed and since they 
can rarely be made by amendment, some other way of making them must 
be found. The ingenuity of lawyers has discovered one method in 
interpretation, while the dexterity of politicians has invented a variety 
of devices whereby legislation may extend or usage may modify the 
express provisions of the apparently immovable and inflexible instru- 
ment.” 

To all of this conservatives may reply that the two amendments re- 
cently passed are a complete answer. 

The weakness of this reply is found in the fact that it has taken a 
very long to pass both of these amendments, although the final steps 
were taken rapidly. In regard to the direct election of United States 
Senators not only have there been decades of agitation, but as Mr. Bryce 
points out (page 370) : 

“More than half the states have, since 1895, petitioned Congress to 
summon a convention to consider the propriety of so amending the Con- 
stitution as to vest the election (of Senators) in the people instead of 
the legislatures of the states. Congress has so far (1910) declined to do 
this, although the House has passed favoring resolutions, the Senate 
has always refused to concur.” 

The great reason for the speedy adoption of this amendment wa§ 

65 


undoubtedly the Lorimer scandal making the previously well-defined 
popular opinion quite irresistible. 

In regard to the Income Tax Amendment the Congress expressed 
the demand of the people in the year 1894. The Supreme Court exhib- 
ited the need for a constitutional amendment in 1896. Is not seventeen 
years a somewhat unnecessarily long time in which to make as law the 
will of an overwhelming majority of the people? 

It should not require a civil war or a national scandal, exhibiting to 
the world the depths of legislative debauchery, to amend the Constitution 
so that it may represent the established convictions of the people, nor 
is it in the interests of responsive efficient government for the hands of 
Congress to be tied for seventeen years in the important matter of justly 
distributing governmental burdens by the lack of power universally 
conceded proper for Congress to possess. 

In regard to the proposal for a 30-year constitutional convention, 
the interested student should refer to the note in the “American Common- 
wealth” on Constitutional conventions. On the whole, constitutional con- 
ventions have brought forward much of the ripest wisdom in each gen- 
eration. They have attracted enormous public attention, hence insuring 
responsiveness to the public weal not exhibited by the usual Legislature. 
They have also attracted to their deliberations the ablest and most high- 
minded students of governmental problems. The recurrence of such a 
convention every thirty years would insure threshing out, in an as- 
sembly of unusually high character, the great political questions of each 
generation. There would be no incentive to interested beneficiaries of 
special privilege to fight the calling of such conventions. There would 
be no need of long periods of struggle with political chicanery to obtain 
consideration of widespread popular demands. Character and wisdom 
assured by all precedent in such a convention would make such a body 
a distinct addition to the regularly constituted deliberative assemblies 
of our government. 


THE REMEDY. 

The joint resolution provides for the addition of Article 18, to the 
Constitution thereby leaving undisturbed the methods of amendment pro- 
vided in Article 5, and also the important provision that “No State with- 
out its consent shall be deprived of its equal suffrage in the Senate.” 

The proposed Article 18 provides: 

Amendments may be proposed in three ways: 

By a majority of both Houses of Congress. 

By the thirty-year Constitutional convention. 

By one-fourth of the States, acting through their Legislatures or by 
direct popular vote. 

Amendments proposed are to be submitted at the next Congressional 
election — for ratification or rejection. 

Amendments proposed are to be ratified by direct vote of a majority 
of all the electors voting thereon, which must include also a majority of 
the electors voting thereon in a majority of the States. 

The final paragraph is: 

“The Congress shall by appropriate legislation provide for the hold- 

66 


ing of a convention in the year 1920 and every thirty years thereafter 
for proposing amendments to this Constitution.” 

For purposes of convenient comparison the present amending 
clause of the Constitution is here printed : 

“The Congress, whenever two-thirds of both Houses shall deem it 
necessary, shall propose amendments to this Constitution, or, on the 
application of the Legislatures of two-thirds of the several States, 
shall call a convention for proposing amendments, which, in either 
case, shall be valid to all intents and purposes, as part of this Constitu- 
tion, when ratified by the Legislatures of three-fourths of the several 
States, or by conventions in three-fourths thereof, as the one or the 
other mode of ratification may be proposed by the Congress ; Provided, 
That no amendment which may be made prior to the year one thou- 
sand eight hundred and eight shall in any manner affect the first and 
fourth clauses in the Ninth Section of the first Article; and that no 
State, without its consent, shall be deprived of its equal suffrage in 
the Senate.” 


JOINT RESOLUTION. 

Proposing an Amendment to the Constitution of the United States 

Resolved by the Senate and House of Representatives of the United States of 
America in Congress assembled ( two-thirds of each House concurring therein), 
That the following be proposed as an amendment to the Constitution of the United 
States, which shall be valid to all intents and purposes as part of the Constitution 
when ratified by the legislatures of three-fourths of the States : 

“ARTICLE XVIII. 

“Sec. — . Amendments to this Constitution may be proposed by the Congress 
whenever an absolute majority of both Houses in the same session of Congress shall 
deem it necessary, or by conventions to be called as hereinafter set forth, or by not 
less than one-fourth of the States, provided the States proposing such amendments 
contain not less than one-fourth of the population of all the States as shown by the 
last preceding decennial enumeration. Such proposal by the States may be made 
either by the legislatures thereof, or by the vote of a majority of the electors voting 
thereon in any State making provision for the submission of such a proposal to 
popular vote. Amendments proposed, as above provided, shall be submitted at the 
next ensuing election of Representatives in each of the several States, directly to 
the electors qualified to vote for the election of Representatives in accordance with 
the regulations of each of the States where provision for such vote is made by the 
State. In default of State regulation thereof the vote upon proposed constitutional 
amendments shall be taken in such manner as the Congress shall provide. If in the 
majority of the States a majority of the electors voting thereon approve the pro- 
posed amendments, and if the majority of all the electors voting thereon shall also 
approve the proposed amendments, they shall be valid to all intents and purposes as 
part of this Constitution. 

“The Congress shall by appropriate legislation provide for the holding of a 
convention in the year nineteen hundred and twenty, and every thirty years there- 
after, for proposing amendments to this Constitution.” 


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Permanent Tariff Commission 


THE PLEDGE. 

“We believe in a protective tariff which shall equalize con- 
ditions of competition between the United States and foreign 
countries, both for the farmer and the manufacturer and which 
shall maintain for labor an adequate standard of living. 

“Primarily the benefit of any tariff should be disclosed in 
the pay envelope of the laborer. We declare that no industry 
deserves protection which is unfair to labor or which is operating 
in violation of federal law. We believe that the presumption 
is always in favor of the consuming public. 

“We demand tariff revision because the present tariff is 
unjust to the people of the United States. Fair dealing toward 
the people requires an immediate downward revision of those 
schedules wherein duties are shown to be unjust or excessive. 

“We pledge ourselves to the establishment of a non- 
partisan scientific tariff commission, reporting both to the Presi- 
dent and to either branch of Congress, which shall report, first, 
as to the costs of production, efficiency of labor, capitalization, 
industrial organization and efficiency and the general competitive 
position in this country and abroad of industries, seeking protec- 
tion from Congress ; second, as to the revenue-producing power of 
the tariff and its relation to the resources of government; and, 
third, as to the effect of the tariff on prices, operations or middle- 
men, and on the purchasing power of the consumer. 

“We believe that this commission should have plenary power 
to elicit information, and for this purpose to prescribe a uniform 
system of accounting for the great protected industries. The 
work of the commission should not prevent the immediate adop- 
tion of acts reducing those schedules generally recognized as 
excessive.” 

- — Progressive National Platform . 


THE FULFILMENT. 

H. R. 4813. Introduced by Representative Victor Murdock of Kan- 
sas, May 6, 1913. Referred to the Committee on Ways and Means. 


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Tariff Commission 


THE NEED. 

The 531 members of the Sixty-third Congress (Senators and Rep- 
resentatives) may be classified from the Congressional Directory as 
follows : 

343 Lawyers. 

7 Physicians. 

29 Journalists. 

12 Teachers. 

30 Unclassified (politicians.) 

and only 

91 Business men (including bankers), and 

19 Farmers. 

This is the composition of the body which revises the tariff duties. 
It may be liberally assumed that possibly 100 out of 531 possess a little 
first hand knowledge about a few of the schedules. 

The Underwood Bill was introduced April 7, 1913 — a document of 
218 pages, with a total of 5,439 lines. Some of these lines read as 
follows : 

“amidosalicylic acid, binitrochlorbenzol, diamidostilbendisulfo- 
acid,” 10 per centum ad valorem. 

“croton, ichthyol, juglandium, palm, palm-kernel, soyabean” 
(oils) free. 

This bill was referred to the Ways and Means Committee, consisting 
of 15 lawyers, 2 journalists, 3 unclassified (politicians), and 1 business 
man. 

After two weeks’ “consideration” the Committee reported the bill 
back to the House without amendment on April 21, 1913, with an ex- 
planatory hand book containing 750 pages of fine print. Seventeen days 
later, May 8, this bill passed the House. The duties on over 3,500 articles 
had been “considered” by a committee of 21 for two weeks and by a 
House of 435 for seventeen days. The prosperity of industry after indus- 
try had been weighed in the balance, the great policy of an income tax had 
been debated and the rates fixed, administrative provisions of enormous 
importance had been determined upon — in a total of 31 days by a body 
of 435 men largely without training or experience in the problems in- 
volved who for the most part had not the slightest exact knowledge con- 
cerning what they were doing. 

Victor Murdock, Progressive leader in the House, and a member 
of the Ways and Means Committee, well wrote in his minority report : 

“If there had been wanting in the tariff experience of the 
past proof of the absolute necessity of a tariff commission, as pro- 

71 


posed by the Progressive Party, the present measure H. R. 3321 

alone could supply it.” 

On June 16 the Chamber of Commerce of the United States pub- 
lished a report of its referendum on the advisability of a tariff com- 
mission — 725 votes were cast “Yes”; and 9 votes “No.” The total of 
834 yotes were cast by commercial organizations representing 113,389 
firms and individual business men scattered over 36 states. 

Necessarily members of Congress in framing tariff bills must rely 
on expert advice, which under the present system is furnished in a hap- 
hazard way partly by Government experts and partly by experts em- 
ployed by private individuals pecuniarily interested in tariff making. 
A choice example of the results of this system — or better, the lack of 
any system — has been given publicity by Senator Poindexter. 

Extract from speech of Hon. Miles Poindexter, in the Senate, Sep- 
tember 6th, 1913 : 

“For the purpose of illustrating the manner in which this bill has 
been considered and the manner in which the existing law was considered, 
and in which a tariff bill necessarily must be considered so long as the 
present system continues, I ask leave to print as a part of my remarks 
a portion of the Congressional Record of July 23, 1913, beginning at 
page 2970, containing a portion of the debate upon acetic ether. It is 
quite illuminating as to method and as representing a Senate in the very 
act of framing a tariff bill,” — 

Mr. Smoot: Mr. President, I wish to offer an amendment to that 
amendment by making it “10 per centum of.” I wish to call the attention 
of the Senate to the reason why I offer the amendment. If it is not 
10 per cent, ethyl acetate or acetic ether will fall back into paragraph 17 
and take the extreme high rate provided for articles manufactured and 
containing 20 per cent of alcohol or less. The 5 per cent takes care of 
sulphuric ether, which is of course, the great anaesthetic that is prepared 
from ethyl alcohol with sulphuric acid, but ethyl acetate or acetic ether 
is prepared from alcohol with acetic acid and contains about 10 per cent 
of alcohol. Unless we increase 5 per cent to 10 per cent, ethyl acetate 
and acetic ether will fall back into paragraph 17 and take the higher 
rate. If you leave it at 5 per cent, it takes care only of the sulphuric 
ether, which is the anaesthetic. 

Mr. President, I sincerely hope that the Senate will agree to this 
amendment, at least, and not allow those articles to take an extremely 
high rate, and that is what they will do if the bill passes as reported. 

Mr. Johnston of Maine: Mr. President, the reason why the com- 
mittee used that percentage was because the expert upon whom we relied 
stated, and he now states, that 5 per cent of alcohol is sufficient ; that 
beyond that they should pay the duty which articles containing alcohol 
pay; but so far as sulphuric ether is concerned, the expert informs us 
that 5 per cent is sufficient . . . 

Mr. Cummins : While the Senator from Utah is preparing to answer 
the question of the Senator from South Dakota, I should like to ask the 
Senator from Maine whether he disputes the statement made by the 
Senator from Utah in regard to some of the articles here in their ordi- 
nary form, that they would fall under another paragraph with a higher 
duty. 


72 


Mr. Johnson of Maine: I, of course, have no special knowledge of 
my own about it. I do not pretend to have ; but we had an expert upon 
whom iv e relied , and the expert now states to me that that percentage 
is sufficient, notwithstanding the statement made by the Senator from 
Utah. 

Mr. Smoot: I will say to the Senator from Iowa that I am per- 
fectly aware that it is sufficient for the sulphuric ether. 

Mr. Johnson of Maine: I have called the expert’s attention particu- 
larly to the other articles. He is here present. He says it is sufficient 
for them. I know nothing except what he says . . . 

Mr. Williams : Before the Senator from Utah takes his seat, he 
has made the assertion that it will take io per cent. May I ask the Sen- 
ator whence he obtains his information? 

Mr. Smoot : I obtain my information not only from men who pass 
upon the rate of duty levied at the port of New York, but from the 
manufacturers themselves. 

Mr. Williams: You have obtained your information from the man- 
ufacturers ? 

Mr. Smoot: Yes; from the manufacturers. 

Mr. Williams: Have you obtained your information from any men 
who are experts with regard to these particular matters and found that 
amount of alcohol to be necessary? 

Mr. Smoot : I have. 

Mr. Williams : So it is a difference of opinion between your expert 
and the expert who serves the Senator from Maine, is it? 

Mr. Crawford : What I want to find out is whether we are spending 
time over some technical classification of ether which may not be in 
general significance or general use or whether it is something of more 
consequence. I am sure I do not know. 

Mr. Smoot : They are used very extensively. 

Mr. Bristow : Mr. President, I should like to ask the Senator from 
Utah what is the present duty, and whether the proposed duty as he 
estimates increases or decreases the rate of the present law ? 

Mr. Smoot: If they fall into paragraph 17, as the wording of the 
paragraph will take them, then they will carry an increased percentage. 

Mr. Stone: Mr. President, while I do not want to be offensive — * 
far from it — I should like to inquire again of the Senator from Utah 
(Mr. Smoot) just upon what information he bases this positive assertion 
of his about a technical matter of this kind? 

Mr. Smoot.: Mr. President, the information upon which I base my 
statement is obtained from an expert who has given me the information 
and also from the manufacturers of ether. 

Mr. Stone: The expert who gave the information. I am curious, 
if I may, venture the inquiry, to know who this expert is. Whom does 
he serve — the Government or some private interestf 

Mr. Smoot: He serves the Government; but any Senator has the 
perfect right to write to New York to find out exactly how these articles 
enter into this country, the classifications under which they come, and 
the rates that are imposed upon them, or for any other information con- 
nected therewith. 

Mr. Stone: But the Committee can not write to the expert unless 

73 


we know who he is. If he is a Government official, we would like to 
communicate with him and see whether the other expert furnished by 
the Government of the United States, in the employ of the United States, 
and supposed to be thoroughly competent in matters of this particular 
kind, tells the Committee what has been related here in the hearing of 
the Senate. This expert is here at the call this moment of Senators. 
He states one thing. The Senator from Utah assumes to contradict him 
and assumes to have some special scientific knowledge of this matter, 
but when we ask him about it, it seems he quotes from some mysterious 
man off in New York, who, he says, is in the Government employ. Of 
course, I accept his statement that the man is in the Government employ ; 
and if so, I should like to question him and the Committee would like to 
question him. Who is he? 

Mr. Smoot: Well, Mr. President, so far as that is concerned, I am 
not compelled to tell the Senator to whom I write or where I get my 
information. 

Mr. Stone : No ; the Senator is not compelled to do so. 

Mr. Smoot : I want to say that if the Senator really desires to know, 
and is interested in finding out, I can tell the Senator and will tell him. 

Mr. Williams: I will tell the Senator from Missouri. I have the 
information here. 

Mr. Stone: Very well. 

Mr. Williams : The expert the Committee had was an expert chemist 
who happens to have a German name, and I find that this language 
occurs in some notes and observations compiled by Thomas J. Doherty, 
Esq., u'lio is a special attorney of the Customs Division. He seems 
evidently to have been the expert who gave the Senator from Utah his 
information. ... 

Now, we will put the chemical expert whom the Committee had 
against the legal expert whom the Senator had,- and try it out anyhow 
in the shape of the law as we have drawn it. 

The demand for a Tariff Commission is briefly that the standards 
and guides for fixing tariff duties shall be determined by a non-partisan 
body of experts. In order that this demand shall be made effective an 
exact understanding of the composition and powers of the Commission 
is necessary. Many opponents of the Progressive demand claim to be 
its friends. They claim to believe in a tariff commission, but the bills 
they draft provide for commissions of such limited powers as to be 
practically useless. 

For example each of the bills presented by Congressmen Mann, 
Lenroot and Campbell, three of the Republican leaders in the House! 
provide that the only penalty for failure to obey the subpoena of the 
Commission shall be a report of the contumacy to Congress. Inasmuch 
as the Tariff Commission is not a Committee of the House but a perma- 
nent body appointed by the President such a report to Congress is not a 
means of compelling obedience but simply a futile protest by the Com- 
mission against the results of its helplessness. Such a Commission 
could neither command respect nor produce reliable statistics. 

Therefore in explaining the need for a Tariff Commission it is most 

74 


important to point out exactly the kind of a Commission needed, what its 
powers should be and why. In the abstract of the Progressive proposal 
therefore are included the main arguments for the creation of a perma- 
nent, efficient, non-partisan Commission of experts endowed with plenary 
powers of investigation and a comparison with makeshift insincere pro- 
posals. 


THE REMEDY. 

Section i. Five Commissioners; ten year terms expiring every two 
years; salary $7,500. Not more than three members of one political 
party. The eligibility clause is made more drastic than in any other bill, 
in providing that no member of the Commission shall hold any other 
public office and the power of the President to remove is increased to 
include “Upon proof of ineligibility or any violation of any provision of 
this act,” which means for example that if a commisioner begins to en- 
gage in other business contrary to the provisions of the act, he can be 
removed ; a contingency not taken into consideration in other bills. 

Sec. 3. The Commission’s powers of investigation are broadened 
and at the same time made more definite. Not only cost of production 
but selling price, both of raw material and finished products are in- 
cluded. Questions concerning the control of markets and absence or 
pressure of free competition may be investigated by the Commission so 
far as pertaining to the tariff question. The exact language of the 
Progressive program is used in giving the Commission the power to 
investigate the capitalization of industrial organizations and “the gen- 
eral competitive situation in this country and abroad of industries seeking 
protection from Congress” and in the language “the revenue producing 
power of the tariff and its relation to the resources of government. The 
effect of tariff both of the United States and of foreign countries on 
prices, on the operation of middle-men, on the wages paid for labor and on 
the purchasing power of the consumer.” In holding hearings the Com- 
mission is given the power not only to investigate the cost of production 
but also the effects and operations of tariff schedules. 

Sec. 4. To assist the President, the Commission is empowered not 
only to make report on the effect of tariff rates, etc., of the United 
States but of foreign countries on the importation of products both in the 
United States and in foreign countries. Also by direction of the Presi- 
dent, the Commission is authorized to draft a plan for scientific classi- 
fication of schedules. This scientific classification has been advocated by 
students of tariff problems for a long time as a powerful aid in elim- 
inating the enormous number of cases constantly litigated to determine 
what classification the particular imported article should receive. 

Sec. 5. The powers of the Commission to compel testimony and 
the production of documentary evidence given by this section are the 
crux of the bill. Failure to give such powers leaves the tariff commis- 
sion without teeth and those persons cannot sincerely claim to support 
the tariff commission proposition who persist in attempting by their bills 
to create a Commission which has no power to demand and enforce the 
production of necessary evidence on which to base reports. The 
provision in the usual bill that in case of recalitrancy the Commission 

75 


shall report the offending person or corporation to Congress, is a sort of 
slap-on-the-wrist proposition of punishment which is quite absurd. The 
idea is of course that Congress can refuse to listen to the pleas of such 
persons and will assume that they are improperly benefiting by tariff 
rates. In fact, however, Congress could not, and would not, do any such 
thing. Suppose that half of the wool manufacturers refused to testify 
and produce books and the other half gave all the testimony desired, the 
Commission would not have adequate information upon which to sur- 
vey the woolen industry. Yet Congress could not discriminate against 
the wicked wool man without also injuring the good wool man who had 
been ready and willing to give information. In a word, if the law does 
not give the tariff Commission itself, of its own motion, the power thor- 
oughly and fully to investigate, for efficient results it would be almost as 
well not to create the Commission at all. To create the Commission so 
as to rely upon its reports and then to tie its hands so that it cannot serve 
Congress as it should, is to present to the people the appearance of scien- 
tific revision and continue the absurd unscientific fixing of schedules that 
we have protested against. 

To give the Commission “teeth,” first it is empowered “To pre- 
scribe and enforce uniform systems of accounting.” The point of this 
is of course that the comparison between different industries and the 
proper consideration of the actual effects of tariffs are exceedingly difficult 
when the system of accounting in one concern does not compare at all 
with the system in another, so that costs of production and similar im- 
portant matters cannot be determined in such a way as to be readily 
compared. 

Sec. 6. In this section is the real difference between this bill and 
others in the inclusion of “teeth” as above described. The power to 
compel testimony and require production of books and documents for 
evidence is fundamentally a judicial power and grave criticisms may be 
made should this power be given without qualification to the Commis- 
sion because the Commision would then be practically constituted as a 
judicial body. But this power can be given to the Commission on the 
same theory used in the Interstate Commerce Commission Act, by pro- 
viding that the Commission may invoke the aid of the District Courts of 
the United States and obtain orders, writs and other processes necessary 
to produce testimony just as if the hearing were before the court itself. 
These provisions will be difficult for opponents to criticise because they 
are based on the precedent followed in other laws, such as the Interstate 
Commerce Act and the particular provisions here are translated from the 
tentative bill to create an Interstate Trade Commission included in the 
report of the Interstate Commerce Committee, in the Senate. Those who 
propose any method other than this, advocate a toothless commission and 
subject themselves to the criticism that they are putting forward a sham 
enactment. 

No serious question can be raised as to the constitutionality of this 
grant. Congress is specifically granted the power to levy and collect 
taxes and imposts and to pass all legislation necessary and proper to 
exercise this power. Obviously the taxes, particularly import duties 
cannot be imposed for the benefit of American manufacturers without 
accompanying power to investigate domestic industries so as to deter- 

76 


mine their needs. If Congress has the power to levy protective duties or 
duties for revenue it certainly must have the power to require that it be 
correctly informed as to the measure of protection needed and the 
measure of revenue obtainable. 

Sec. 7- The Commission must undoubtedly have power to keep 
confidential secret processes and trade secrets and obtain information 
for confidential use without divulging the names of the informers. This 
has been recognized in other bills on the subject and the present bill also 
very carefully limits the powers of the Commission in this regard so 
that its right to. hold secret sessions may not be abused and so that it 
may not be subjected to pressure from interested persons to continually 
hold secret sessions which would serve to prejudice public opinion against 
the Commission and shake public confidence in its reports. For ex- 
ample, the provision in certain bills that the Commission meet upon the 
request of any witness to take evidence at a secret meeting is most dan- 
gerous. The Commission would be continually pressed to hold secret 
sessions by manufacturers and other producers. Therefore in the present 
bill the power of the Commission to hold secret sessions is limited strictly 
to hearings of testimony concerning trade secrets and secret processes 
which are “not contrary to public policy” and only such are not to be 
reduced to writing. All other proceedings before the Commission being 
made matters of written record. 

Sec. 8. In this section not only is Congress, but the President per- 
mitted to direct special reports, which, in view of the need of the Presi- 
dent for information in preparing his messages to Congress and in as- 
certaining tariff needs at times when Congress shall not be in session 
seems reasonable. The most important word in this section is that the 
Commission shall make report to Congress of its investigations and 
“conclusions.” There has been much criticism of the idea that the Com- 
mission should “recommend” to Congress, and this has been based upon 
not only a certain jealousy of power, which is rather an unworthy mo- 
tive, but also on the reasonable idea that the Commision, if empowered to 
make recommendations, would tend toward holding the brief for one 
side or another. In other words if the Commission is forced to take the 
position of advocate of action by Congress the Commission will tend to 
become partisan in its advocacy. To meet these points the usual pro- 
vision is that the Commission shall simply make report. Such a pro- 
vision seems to have overlooked one highly useful feature of a Commis- 
sion report. Not only should such an investigative body make the re- 
turn of the facts but they should also be permitted to analyze these facts 
for the benefit of non-experts. The average member of Congress cannot 
by any possibility become, within a few years, an expert on tariff prob- 
lems. To give the average member, therefore, merely a mass of material 
concerning products, their cost, selling price, etc., is simply to furnish 
him with material for an exhaustive study which he is unlikely to have 
the time to make, and material which he should analyze, which his train- 
ing has not fitted him to analyze. Therefore, without recommending 
action by Congress it seems desirable that this Commission should analyze 
the results of its own investigations so as to present them in under- 
standable shape for the non-expert. To make an arbitrary example, in 
the case of sugar; assuming a prevailing duty of ic a pound, the Com- 

77 


mission might well report that a rate of somewhere between 75/100 of 
one cent and ic would substantially protect American production, but 
at the same time permit considerable importation; that a duty of ic to 
i l / 2 c would tend to prohibit importation; that a duty of less than 75/100 
of one cent would tend to free competition between American and for- 
eign sugar, and that a duty of less than y 2 c would produce a large reve- 
nue by heavy importation, at the expense of American production. In 
other words, in connection with investigative material, there can be little 
harm and much benefit to be derived from an expert report of con- 
clusions thereon. The action to be taken by Congress will be determined 
by the political or economic theory controlling Congress in regard to the 
tariff and by agreement or disagreement with the conclusions of the 
Commission. But for the benefit of the non-expert, a report of con- 
clusions will be of incalculable value and to prohibit the Commission 
from making report, seems unnecessarily and wilfully limiting its powers 
of usefulness. 

A BILL. 

To Create a Tariff Commission 

Be it enacted by the Senate and House of Representatives of the United States 
of America in Congress assembled, That there is hereby created a body to be known 
as the Tariff Commission, which shall consist of five commissioners, who shall be 
appointed by the President, by and with the advice and consent of the Senate. No 
person shall be eligible to serve as a member of said commission while holding any 
other public office of either honor or profit, either by election or appointment, or 
who is a Senator or Representative elect of the United States. Not more than 
three of said commissioners shall be members of the same political party. The 
commissioners first appointed under this Act shall continue in office for the terms 
of two, four, six, eight, and ten years, respectively, and from the first day of July, 
anno Domini nineteen hundred and thirteen, the term of each to be designated by 
the President, but their successors shall be appointed for terms of ten years, except 
that any person chosen to fill a vacancy shall be appointed only for the unexpired 
term of the member whom he shall succeed. Any commissioner may, after due 
hearing, be removed by the President upon proof of ineligibility or of any violation 
of any provision of this Act, or for inefficiency, neglect of duty, or malfeasance in 
office. No vacancy in the commission shall impair the right of the remaining com- 
missioners to exercise all the powers of the commission. Said commissioners shall 
not engage in any other business, vocation, or employment. Each commissioner 
shall receive a salary of $7,500 per year. The President shall designate a member of 
the commission to be chairman thereof during the term for which he is appointed. 
The commission shall appoint a secretary, who shall receive a salary of $5,000 per 
annum, and such other employees as it may find necessary to the proper perform- 
ance of its duties and shall fix the salary or compensation of each. Three com- 
missioners shall constitute a quorum for the transaction of business as a com- 
mission. 

Sec. 2. That the principal office of the commission shall be in the city of 
Washington, and the Secretary of the Treasury shall furnish the commission with 
suitable offices and equipment thereof and with all necessary supplies. The com- 
mission shall, in addition, have full authority as a body by one or more of its mem- 
bers or through its employees, when so authorized by the commission, to conduct 
investigations at any other place or places, either in the United States or foreign 
countries, as the commission may determine. Said commission shall promulgate 
rules and regulations for the safekeeping of all papers, correspondence, tabulations, 
reports, explanations, and. other information gathered by it. All of the expenses of 
the commission, including all necessary expenses for transportation incurred by the 
commissioners or by their employees under their orders, in making any investigation 
in any place other than in the city of Washington, shall be allowed and paid on the 

78 


presentation of itemized vouchers therefor approved by the chairman of the com- 
mission. 

Sec. 3. That the commission shall have authority and power, and it is hereby 
directed to ascertain and tabulate for purposes of comparison the difference in the 
cost of producing articles of the same or similar quality and kind in this country 
and in actually or potentially competing foreign countries. The commission shall 
ascertain and tabulate for purposes of comparison where such tabulation is prac- 
ticable in connection with the several articles covered by its reports in the United 
States, and in such foreign countries the wages, hours of service, and efficiency of 
labor employed and the standards of living of such laborers. The commission shall 
likewise ascertain the cost and selling prices of raw material, the cost of labor, the 
fixed charges, the depreciation upon the true value of the capital invested, and all 
other items entering into and determining the true cost and selling price of the 
finished product. The commission shall ascertain the market conditions and the 
prices at which protected products of the United States are sold in foreign coun- 
tries, as compared with the prices of such products sold in the United States. The 
commission shall investigate the effect of transportation rates upon the markets 
and prices of dutiable products, and so far as pertinent to the tariffs fixed upon 
articles on the dutiable list the control of such markets and absence or presence of 
free competition in the same, and shall, pursuant to the purposes of this Act, in 
so far as practicable, investigate all questions and conditions relating to the agri- 
cultural, manufacturing, mining, commercial, and labor interests with reference to 
the tariff schedules and classifications of the United States and of foreign countries, 
and shall investigate the capitalization, industrial organization and efficiency, and 
the general competitive position in this country and abroad of industries seeking 
protection from Congress. The commission shall likewise investigate in general 
and in regard to particular articles the revenue-producing power of the tariff and its 
relation to the resources of government, and shall investigate the effect of tariffs 
both of the United States and of foreign countries on prices, on the operations of 
middlemen, on the wages paid for labor, and on the purchasing power of the con- 
sumer. The commission shall also make investigation of any particular subject 
whenever directed by either House of Congress or the President of the United 
States. The commission shall have the power to call upon any of the existing 
departments or bureaus of the Government for information on file in such depart- 
ments or bureaus which it may require in connection with the work which it is 
authorized to do by this Act, and it shall be the duty of every such department or 
bureau of the Government to furnish such information on request from the com- 
mission. It shall be the duty of said commission to hold hearings from time to 
time at such places as it may designate to determine industrial, commercial, and 
labor conditions in relation to costs of production and effects and operations of the 
tariff schedules and classifications in force in the United States and in foreign 
countries. Such hearings shall be public, except as otherwise herein provided. The 
commission shall, whenever practicable, give at least ten days’ public notice of any 
and all such hearings, and at any such hearing any person may appear before said 
commission, subject to such reasonable limitation upon the amount of and duplica- 
tion of testimony and arguments as may be provided by the rules of said com- 
mission, and be heard or may be represented by attorney and may file any written 
statement or documentary evidence bearing upon any matter which the commission 
may have under investigation. The commission may from time to time make or 
amend such general rules or orders as may be requisite for the orderly regulation 
of proceedings before it, including form of notices and the service thereof. Every 
vote and official act of the commission and of each member thereof shall be en- 
tered of record. Any of the members of the commission or its secretary shall have 
the power to administer oaths and affirmations and to sign notices. 

Sec. 4. That to assist the President in securing information as to the effect 
of tariff rates, restrictions, exactions, or any regulations imposed at any time by the 
United States or any foreign country upon the importation into or sale in the 
United States or any foreign country of the products affected, and as to any export 
bounty paid or export duty imposed or prohibition made by any country upon the 
exportation of any article to the United States which discriminates against the 
United States or the products thereof, and to assist the President in the. application 
of the maximum and minimum tariffs and other administrative provisions of the 
customs laws and in obtaining information concerning the economic results of said 

79 


laws, the commission shall from time to time make report as the President shall 
direct, and upon direction by the President shall draft a plan for scientific classi- 
fication of schedules in aid of administration of the provisions of the customs laws. 

Sec. 5. That for the purposes of this Act in the case of articles on the dutiable 
list, and such other articles as the commission may decide or may be directed to 
investigate, the said commission is authorized to require of any person, firm, co- 
partnership,. corporation, or association engaged in the production, importation, 
manufacture, or distribution of any such article or articles the production of all 
books, papers, contracts, agreements, invoices, inventories, bills, and documents of 
any such person, firm, copartnership, corporation, or association and make every 
inquiry necessary to a determination of the value of such property and necessary 
to accomplish the purposes for which said commission is created. In aid of its 
powers herein granted to secure information the commission shall have the power, 
whenever necessary for the purposes of its investigations, to prescribe and enforce 
uniform systems of accounting for protected industries and for manufacturers and 
producers of commodities protected by import duties. The commission is author- 
ized to require by notice the attendance and testimony of witnesses and the pro- 
duction of all books, papers, contracts, agreements, inventories, invoices, bills, and 
documents relating to any matters pertaining to such investigation. Such attend- 
ance of witnesses and the production of such documentary evidence may be re- 
quired from any place in the United States at any designated place of hearing, and 
witnesses shall receive the same fees as are paid in the Federal courts. 

Sec. 6. That the district courts of the United States, upon the application of 
the commission alleging a failure to comply with any order of the commission with 
relation to the attendance and testimony of witnesses and the production of docu- 
mentary evidence, shall have jurisdiction to issue the necessary process or writs 
for the enforcement of the orders of the commission, and in case of disobedience 
to a subpoena the commission or a member thereof may invoke the aid of any one 
of the district courts of the United States in requiring the attendance and testimony 
of witnesses and the production of books, papers, and documents within the jurisdic- 
tion of such court within which an investigation or inquiry by the commission is 
being carried on. In case of contumacy or refusal to obey a subpoena issued to any 
person or corporation subject to the provisions of this Act, any of the district 
courts of the United States having jurisdiction as herein provided may issue an 
order requiring such person or corporation to appear before the commission and 
produce books, documents, and other papers if so ordered and give evidence con- 
cerning the matter under investigation by the commission, and any failure to obey 
such order of the court may be punished by such court as a contempt thereof. The 
commission may also order testimony to be taken by deposition in any investigation 
and at any stage of such investigation. Such deposition may be taken before any 
person authorized so to do by the commission and who has power to administer 
oaths. Any person may be compelled to appear and depose and produce docu- 
mentary evidence in the same manner as witnesses may be compelled to appear and 
testify and produce documentary evidence before the commission as hereinbefore 
provided. Such testimony shall be reduced to writing. No person shall be excused 
from attending and testifying or from producing books, papers, documents, or other 
things before the commission or in obedience to the subpoena of the commission 
whether such subpoena be signed or issued by one or more of the commissioners or 
the secretary of the commission on the ground or for the reason that the testimony 
or evidence, documentary or otherwise, , required of him may tend to criminate him 
or to subject him to a penalty or forfeiture. But no natural person shall be prose- 
cuted or subjected to any penalty or forfeiture for or on account of any transaction, 
matter, or thing concerning which he may testify under oath or produce evidence, 
documentary or otherwise, before said commission in obedience to a subpoena 
issued by it : Provided, That no person so testifying shall be exempt from prose- 
cution and punishment for perjury committed in so testifying. 

Sec. 7. That in any investigation conducted by the commission as herein pro- 
vided the testimony of any witness in regard to secret processes or trade secrets 
not contrary to public policy shall not be reduced to writing, nor shall any docu- 
ments of like character be copied into the records of investigations or otherwise 
made a part thereof, and for the purpose of obtaining such testimony or of exam- 
ining such documents, and for such purposes alone, the commission shall have the 
power to hold secret sessions and take evidence thereat. All other testimony shall 

80 


be reduced to writing and, with all other documentary evidence received, incor- 
porated in the records of the commission for the guidance of the commission and 
for the use of the President and Congress as hereinafter provided : Provided , That 
no evidence or information secured for the confidential use of the commission shall 
be made public in such a manner as to be available for the use of any business com- 
petitor or rival of the firm, copartnership, corporation, or association from whom or 
concerning whom such evidence or information was obtained : And provided further , 
That in case in any investigation authorized by this Act the commission shall obtain 
evidence or information for its confidential use, the commission shall not be re- 
quired to divulge the names of persons furnishing such evidence or information. _ 
Sec. 8. That the commission shall make annual reports to Congress of its 
investigations and conclusions and such special reports as the President or either 
House of Congress may direct. The annual reports shall be published and ready 
for distribution on the first Monday of December of each year. Upon demand of 
either the President or either House of Congress the commission shall make a 
report of all testimony and information upon which its reports are based. 


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Interstate Trade Commission 


THE PLEDGE. 


“We believe that true popular government, justice and prosperity go 
hand in hand, and, so believing, it is our purpose to secure that large measure 
of general prosperity which is the fruit of legitimate and honest business, 
fostered by equal justice and by sound progressive laws. 

We demand that the test of true prosperity shall be the benefits con- 
ferred thereby on all the citizens not confined to individuals or classes and that 
the test of corporate efficiency shall be the ability better to serve the public; 
that those who profit by control of business affairs shall justify that profit and 
that control by sharing with the public the fruits thereof. 

We therefore demand a strong national regulation of interstate corpo- 
rations. The corporation is an essential part of modern business. The con- 
centration of modern business, in some degree, is both inevitable and neces- 
sary for national and international business efficiency. But the existing 
concentration of vast wealth under a corporate system, unguarded and un- 
controlled by the nation has placed in the hands of a few men enormous, 
secret, irresponsible power over the daily life of the citizen — a power insuf- 
ferable in a free government and certain of abuse. 

This power has been abused, in monopoly of national resources, in stock 
watering; in unfair competition and unfair privileges, and finally in sinister in- 
fluences on the public agencies of state and nation. We do not fear commer- 
cial power, but we insist that it shall be exercised openly, under publicity, 
supervision and regulation of the most efficient sort, which will preserve its 
good while eradicating and preventing its evils. 

To that end we urge the establishment of a strong federal administrative 
commission of high standing, which shall maintain permanent active supervi- 
sion over industrial corporations engaged in interstate commerce, or such of 
them as are of public importance, doing for them what the government now 
does for the national banks, and what is now done for the railroads by the 
Interstate Commerce Commission. 

Such a commission must enforce the complete publicity of those corpora- 
tion transactions which are of public interest; must attack unfair competition, 
false capitalization and special privilege, and by continuous trained watchful- 
ness guard and keep open equally to all the highways of American commerce. 

Thus the business man will have certain knowledge of the law, and will 
be able to conduct his business easily in conformity therewith; the investor 
will find security for his capital; dividends will be rendered more certain, and 
the savings of the people will be drawn naturally and safely into the channels 
of trade. 

Under such a system of constructive regulation, legitmate business, freed 
from confusion, uncertainty and fruitless litigation, will develop normally in 
response to the energy and enterprise of the American business man. 

We favor strengthening the Sherman law by prohibiting agreements to 
divide territory or limit output; refusing to sell to customers who buy from 
business rivals; to sell below cost in certain areas while maintaining higher 
prices in other places; using the power of transportation to aid or injure special 
business concerns; and other unfair trade practices.” 


THE FULFILMENT. 

H. R. 9299, H. R. 9300, H. R. 9301 (“The Trust Triplets”). In- 
troduced by Representative Victor Murdock of Kansas, Nov. 17, 1913. 
Referred to the Committee on Interstate and Foreign Commerce. 

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Interstate Trade Commission 


THE NEED. 

There is imperative need for decisive legislation by Congress on the 
problems arising from the domination of industrial conditions by huge 
business organizations. 

Present commercial conditions have been shaped by two conflicting 
forces: (i) Natural competition; (2) Natural combination. 

Despite the natural tendency of each man to control his own busi- 
ness and to compete with his neighbor for business success, combination 
has been inevitable under the development of modern machinery and the 
growth of great industrial centers. Large aggregations of capital alone 
could develop adequately our natural resources. Great transportation sys- 
tems alone could handle our interstate commerce. Trading corporations 
of a size to do a nation-wide business alone could give adequate service. 
As a result increased power and responsibility have come into a few hands. 
The power has been abused and the responsibility largely ignored. Thus 
natural combination, instead of being merely a limitation upon, has been 
destructive of, natural competition. 

On account of unfair and oppressive competitive practices public 
hostility has been aroused against all large combinations of capital, a 
bitter and not unfounded antagonism of small business men and con- 
sumers to large and powerful corporate enterprises. Therefore the solu- 
tion of our “Trust Problem” is made doubly difficult, because the effi- 
ciency and economy due to concentration is lost sight of, by the average 
citizen, in comparison with the immense evils from which the community 
has suffered through unfair competition and monopoly. 

There are two common attitudes with which one must reckon in this 
problem. 

1. The popularity of a smashing attack on all large enterprises as 
an outlet for the hostlity of the exploited consumer. 

(There is some evidence of the subsidence of this feeling following 
the total failure of the “dissolution” theory as shown in practical opera- 
tion against the Oil and Tobacco trusts,) 

2. A disposition to regard any effort at control of industrial com- 
binations as an acceptance and fostering of monopoly. 

(The extreme advocates of the competitive theory have persistently 
promoted this misunderstanding by referring to all proposals for the 
control of combinations as “regulation of .monopoly.” Such false argu- 
ment deliberately ignores the fact that neither combination nor size has 
any necessary relation to monopoly. One small corporation controlling 
a rare product necessarily used jn many industries might be a far greater 
menace to commerce than a combination of fifty companies representing 
a total capitalization of half a billion, handling only twenty or thirty 

85 


per cent, of a business in which competition by the small capitalist could be 
made profitable.) 

In order, therefore, to understand the spirit of the Progressive Trust 
Bills, two propositions must be regarded as fundamental. 

First, that full opportunity for natural competition must be pre- 
served, and the small business man must be protected from unfair trade 
practices, but that the arbitrary attempt to force an unnatural competi- 
tion by law in the face of economic development will inevitably fail to 
benefit the community. 

Second, that natural combination should be permitted, but that such 
combination must not be permitted to be a means to accomplish monop- 
olistic control. 

Accepting these propositions, we arrive at the following intentions : 

1. Give voluntary competition free play as a regulator of business 
so far as it will go. 

2. Do not attempt by artificial stimulation to make it go farther 
and do more than it can. 

3. Utilize the benefits of inevitable concentration as far as pos- 
sible. Business will not and cannot go back to the gristmill and the 
blacksmith’s forge. 

4. Where concentration would go beyond efficient service into 
monopolistic exploitation — stop it. 

With these considerations in mind a statement of the principles on 
which the “trust triplets” are based is herewith presented in the lan- 
guage of Dean William Draper Lewis of the University of Pennsylvania 
Law School. 

I. Private Monopolistic Power is Contrary to Public Welfare. 

“That industrial monopolies are an evil can here be assumed with- 
out special exposition. True, it is now well recognized that in certain 
activities, such as telephone and gas companies, competition means ex- 
pense and,, discomfort to the public. And even in other fields outside of 
what are how recognized as public utilities it may possibly be shown that 
the interest of the community demands a single service rather than com- 
peting enterprises. But in the absence of the corrective force of natural 
competition there must be an equally powerful force requiring service 
to the community. Where the obligation of public service is not recog- 
nized and enforced the monopoly by private persons of a product neces- 
sary to the people is an unmixed evil. Such monopoly is incompatible 
with the existence of a state organized to promote the welfare of the 
whole people. 

II. Monopoly is Dependent on the Power to Determine Price 

Policy. 

“With this ability not present there is no monopoly. If this is pres- 
ent, monopolistic power— which is the power to exclude competition— is 
found. 

“When prices in an industry are regulated by competition, other 
factors of interest to the consumers, such as the character of the product 
or service, are also regulated by the same force; but when prices are 

86 


controlled by combination, there is unlikely to be effective competition in 
respect to either products or service. The problem presented by the 
existence of a trust, is how to destroy the potential ability of the 'com- 
bination’ to control price policy. 

III. The Primary Object of Anti-trust Legislation Should Be,' Not 

the Destruction of the Combination Possessing Monopolistic 

Power, but the Ascertainment and Removal of the Basis on 

which That Power Rests. 

“As has been pointed out by the Supreme Court, the idea of 
monopoly involves both 'unity’ and 'exclusiveness.’ We cannot think 
of monopolistic power being possessed by a group of persons or cor- 
porations who do not own, operate or organize their businesses, so as to 
constitute substantially a business unit, however informal their com- 
bination or organization from a legal point of view. Those who com- 
bine may do so by forming a single corporation, or the substantial unity 
of their businesses may be effected by a contract between several cor- 
porations, or it may rest on nothing more than tacit understanding. But 
no particular form of organization is necessary. 

“Again we cannot think of a person or group of persons possessing 
monopolistic power unless they have the ability to exclude competition. 
Combination does not necessarily result in monopoly. Those who com- 
bine, even if they do so with the intent to exclude competition, to be 
successful must have a basis on which to rest their power other than 
their wealth or size, although it is true that a trust or monopoly always 
involves a combination express or implied. It was, therefore, natural 
that the framers of the Sherman Anti-Trust Act believed that the disso- 
lution of the trust would destroy the monopolistic power of those who 
controlled it. But our experience with that act indicates that all that 
is accomplished is the destruction of the existing form of combination. 
As those who have combined under the particular form of combination 
destroyed still collectively possess monopolistic power, they naturally 
re-combine in a different form to reap the benefit of that power. In- 
stead, therefore, of being directed towards the dissolution of the par- 
ticular form of organization, legislation should be directed primarily to 
the removal of the basis on which the monopolistic power of the combina- 
tion rests. Where this is discovered and removed all motive for fur- 
ther combination with intent to monopolize ceases. Of course where 
the particular form of combination is an essential element of the monopo- 
listic power it should be dissolved. 

“For instance, all the manufacturers engaged in producing an article 
or group of articles combine to regulate production and prices. Here 
the combination itself should be destroyed. On the other hand, one cor- 
poration controlling perhaps only fifty per cent, or less of the total 
product may possess complete control of prices, either because of its 
control of the natural resources furnishing the raw material on which the 
industry depends, or because of its known willingness to destroy by un- 
fair or oppressive trade practices any competitor who disturbs its con- 
trol of the price policy of the industry. In this case to dissolve ‘the cor- 
poration serves no useful purpose. It is its monopoly of material re- 

87 


sources, or its unfair trade practices which should be destroyed or 
restrained. 

IV. The Basis of the Monopolistic Power of the Industrial Trust 
is Either (i) the Ability and the Will to Engage in Unfair or 
Oppressive Trade Practices Injurious to Competitors, or, (2) 
the Control of a Factor, Essential to the Successful Conduct of 
the Industry, or, (3) the Control of all or Substantially all the 
Product. 

“The control of all or substantially all the product unaccompanied 
by the control of any factor essential to the successful conduct of the in- 
dustry, can create but a temporary monopoly. Stich control, therefore, 
as a basis of monopolistic power is comparatively unimportant. On 
the other hand, where monopolistic power is obtained and retained by 
unfair trade practices, or ‘the threat of such practices, or where it is 
based on the control of an essential factor in the industry, as transporta- 
tion facilities, natural resources, or any other economic condition in- 
herent in the industry unless the basis of the monopoly is removed the 
monopoly in one form or another will be perpetuated. 

V. The Elimination of the Basis of Monopolistic Power and the 
Restoration of Competition is an Administrative Problem which 
Can Be Successfully Solved Only by an Industrial Commission. 

“In every case of alleged monopoly there are three things to deter- 
mine: (1) Does the alleged monopoly exist in fact? (2) What is the 
basis of the monopolistic power? (3) What should be done to destroy 
the basis of that power? The determination of the first or second ques- 
tion is impossible, in view of the complicated nature of modern industrial 
conditions, except by creating a Commission possessing all the powers of 
the Interstate Commerce Commission to investigate facts and require 
from the corporations subject to its jurisdiction information in regard to 
organization, management and financial control. Where it is ascertained 
that the cause of the monopolistic power is unfair or oppressive trade 
practices, the Commission must have power to prohibit those practices, 
and to obtain the help of the courts to enforce their orders. Where the 
monopolistic power rests on the control of an essential factor in the 
industry the Commission must have the power to adapt its remedial 
orders to the facts of the particular case. It would be futile to attempt 
to specify in advance all the circumstances which should be deemed to 
constitute monopolistic power, or direct the exact orders to be given 
for the removal of each class of causes of that power. Each trust pre- 
sents a distinct problem. The administrative body charged with the 
execution of the law must have extensive and flexible powers. 

“Anti-Trust legislation will not effect its purpose until we are will- 
ing to face the fact that the administrative problem of ascertaining in 
any given case, whether in fact a monopoly exists, and, if it exists, the 
basis on which its power rests, is beyond the power of the courts as at 
present constituted. The judge, crowded with other business, has neither 
the training nor the time to acquire the training necessary to deal with 
the problem. It is for this reason that the enforcement of anti-monopoly 

88 


legislation should be placed in the hands of an Administrative Commis- 
sion, provision being made for appeal to the courts as in the case of the 
Interstate Commerce Commission.” 

THE REMEDY. 

With these propositions in mind we may examine the bills in detail. 

The first bill provides for a commission with adequate power to 
ascertain all facts concerning the corporations subject to its jurisdiction. 

The second bill empowers the Federal Commission to terminate by 
executive order unfair competition and other forms of vicious practices. 

The third bill gives to the commission the duty and the means to 
compel the organization and conduct of business in a manner to insure 
the preservation of competitive conditions. 

Bill No. i. To Create an Interstate Trade Commission. 

This bill provides for the creation of an interstate trade commission 
consisting of seven members appointed by the President for terms of 
seven years each, one term expiring every year. Each commissioner is 
to receive a salary of $10,000 in order that men of requisite calibre may 
be drafted into the service. 

To avoid swamping the commission with the impossible task of 
supervision over a myriad of small businesses of no public significance, 
its jurisdiction is limited to those corporations or associations whose 
gross annual receipts from business within the United States exceed 
three million dollars, excluding from the jurisdiction those corporations 
coming within the jurisdiction of the Interstate Commerce Commission. 
The term “corporation or association” includes not only all business 
associations incorporated and unincorporated, but any group of such 
associations owned, operated, controlled or organized as to constitute 
substantially a business unit. 

The first power and duty conferred upon the Interstate Trade Com- 
mission is to obtain from the concerns subject to it, complete information 
as to their “organization, conduct, management, security holders, financial 
condition and business transactions; and to require from such concerns 
complete access at all reasonable times to their records, books, accounts, 
minutes, papers and all other documents, including the records of any of 
their executive or other committees.” • In addition, power is given the 
commission to require uniform and comparable methods of accounting in 
order that the statistics prepared by the commission may be effectively 
intelligible. This simple power of compelling uniform and intelligible 
accounting exercised by the Interstate Commerce Commission over rail- 
roads has gone very far to correct improper transactions, as well as to 
make railroad securities a safe form of investment. The same advance 
can be achieved in industrials. 

The Commission is empowered to enlighten the public by pointing 
out all cases of material over-capitalization, unfair competition, mis- 
representation, or oppressive use of credit. 

In view of the numerous difficulties in enforcing decrees of disso- 
lution entered under the Sherman Act, an incidental power given to the 
commission is to make an investigation and report as to the best method 

89 


of carrying out such a decree when the court having jurisdiction shall 
request such a report. 

The Interstate Trade Commission has been given “teeth” in the 
grant of plenary powers to require the giving of testimony and the pro- 
duction of all documents needed for its investigations and to invoke the 
aid of the United States Courts in compelling obedience to its orders. 
These powers are most elaborately worked out in Section 5 of this bill, 
and the subsequent sections make it the duty of corporations or asso- 
ciations and individuals to assist and to obey the commission in matters 
within its jurisdiction, under penalties of fine and imprisonment. 

Bill No. 1 therefore creates a commission with power to ascertain 
facts in relation to corporations subject to its jurisdiction, and gives 
the commission power to sweep away from illegitimate business the pro- 
tections of secrecy. Its enactment would create a permanent force of 
experts trained in the complexities of business, and devoting their whole 
time to the one work. 

Bill No. 2. To Empower the Interstate Trade Commission to 
Prevent Unfair Competition. 

Bill No. 2 commences with the declaration “That unfair or op- 
pressive competition in commerce, among the several States and with 
foreign nations, as hereinafter defined, is hereby declared to be unlaw- 
ful.” The bill then proceeds to enumerate various unfair business prac- 
tices. Among the business practices definitely condemned in section 
three are: The acceptance or procurement of rates or terms of service 
from common carriers not granted to other shippers under like condi- 
tions ; the acceptance or procurement of rates or terms of service declared 
unlawful by the Elkins Act; arbitrary discrimination in selling prices 
between localities or individuals; obtaining secrets of competitors by 
bribery and like means, or procuring dishonest conduct by employees of 
competitors ; making oppressive exclusive contracts for the sale of articles 
over which the seller has a substantial monopoly; maintaining secret 
subsidiaries or agencies held out as independent; and the use of inter- 
« locking directorates to destroy competition. 

It will be observed that all of the unfair trade practices thus specifi- 
cally prohibited, have already been declared illegal by the courts, or by 
other statutes, or are such as are unanimously condemned as unfair by 
the common experience of mankind. The law of unfair trade, as other 
branches of the law of tort, has been and is being constantly developed 
by the courts, as new conditions make possible new ways of wronging a 
competitor, or greater experience or improving morals cause acts, formerly 
regarded as innocent, to be looked upon as unlawful. To attempt to 
arrest this process by codifying all the acts which one should regard as 
unfair in trade would be most unfortunate. Instantly some new practice 
would be found not covered by the code, which practice would neverthe- 
less be essentially unfair. 

Section 3 (h) of the bill therefore declares that any other business 
practice involving unfair or oppressive competition shall be so regarded, 
while section 4 gives to the Interstate Trade Commission power “to make! 
alter, or repeal regulations further defining more particularly the practices 
and business transactions of unfair or oppressive competition.” This is 

90 


merely lodging in the commission a power heretofore exclusively exer- 
cised by the courts. The court's power is in no wise lessened. The Com- 
mission’s power further to define unfair trade practices is subject to 
review by the courts. If the Commission declares a certain practice 
unfair, the courts would properly refuse to enforce the order if, in their 
opinion, the practice condemned was not unfair. The great practical 
advantage of lodging the power further to define more particularly unfair 
practices in the Commission, is that the business world will know before 
it acts what the Commission thinks unfair, while the courts in finally 
determining the law will have the inestimable advantage of the opinion 
of a body of experts. 

Having established what are unfair business practices the Interstate 
Trade Commission is given the power to summon a corporation or asso- 
ciation to appear before it and show cause why an order should not be 
issued by the commission restraining the concern from engaging in a 
designated form of unfair competition. If a corporation refuses to obey 
such an order the commission is empowered to invoke the aid of a district 
court of the United States, and the court is authorized to enforce the 
orders of the commission, by injunction, or in case of violation of injunc- 
tion, to restrain the offender from engaging in Interstate Commerce. 

Bill No. 3. To Empower the Interstate Trade Commission to Pro- 
tect Commerce Against Monopolies. 

In this Bill the commission is empowered and directed upon its own 
initiative or upon complaint to investigate any corporation or association 
subject to its jurisdiction, to determine whether or not such concern 
exercises “substantially monopolistic power.” 

In the second section it is provided that a corporation or association 
“shall be regarded as exercising ‘a substantially monoplistic power’ when- 
ever such corporation or association, not being subject to the obligation 
of public service, in the given industry in question exercises control over 
a sufficient portion of such industry or over sufficient factors therein, to 
determine the price policy in that industry either as to raw materials or 
finished or partly finished products.” Such power is thereupon declared , 
to be contrary to public policy. 

In the investigation of alleged “monoplistic power” it is made the 
duty of the commission to determine whether the power has an artificial 
or natural basis. The duty of the commission upon finding that the 
monopolistic power is based upon unfair competition, that is, has an arti- 
ficial basis, is plainly to enforce the provisions of the second bill. .But 
the commission may find that the alleged monopolistic power is founded 
upon one of the so-called natural bases which for the purpose of the Bill 
are defined as : 

(aa) Control of natural resources. 

(bb) Control of terminal or transportation facilities. 

(cc) Control of financial resources. 

(dd) Any other economic condition inherent in the charac- 
ter of the industry, including among such condi- 
tions, patent rights. 

If the Commission shall find that a corporation or association exer- 
cises “substantially monopolistic power” based, not on wrongdoing, but 

91 


on a so-called “natural basis,” it is made the duty of the commission to 
issue an order to the concern “specifying such changes in the organiza- 
tion, conduct or management of its property and business as in the opin- 
ion of the commission will most effectively and promptly terminate, such 
monopolistic power while at the same time safeguarding property rights 
and business efficiency.” 

In Section 6, it is provided that when a corporation or association 
refuses to comply with the order of the commission specifying the neces- 
sary changes to terminate monopolistic power, the commission may apply 
to a district court of the United States “for the appointment of a super- 
visor or supervisors of such corporation or association, and it shall be the 
duty of such court upon such request by the commission to appoint for a 
limited time such supervisor or supervisors for such corporation or asso- 
ciation, and to give such supervisors such powers as are usually granted 
to receivers and full power of such direction and control over the organi- 
zation, conduct and management of such corporation or association and 
the business and property thereof as shall be best fitted to carry into effect 
the order of the commission.” 

Following this procedure the supervisors report to the commission 
regarding the organization and business effected, and are granted the 
power to carry out the further orders of the commission in order that 
the commission may be intimately informed as to the best methods for 
terminating the monopolistic power involved, and in order that in the 
meantime the business may be run for the benefit of the investor and the 
community alike. When a definite plan has been worked out whereby 
the corporation may be restored completely to its private ownership under 
terms guaranteeing the protection of commerce, the court may in termin- 
ating the supervisory control “in order to insure the permanency of com- 
petitive conditions include in its decree a provision submitting the super- 
vised corporation or association and its business or any part thereof to 
the supervision or direction of the commission for such time and in such 
manner as said court shall fix.” 

It may be that the solution of a particular question involved in the 
acquirement of monopolistic power will be the separation of one factor of 
the business, establishing either its independence or its subjection to the 
obligation of public service. It may be that the solution will be the separa- 
tion of a concern into two or more parts which will necessarily be respon- 
sive to natural competition. It may be merely a change in an administra- 
tive form of management, such as the breaking up of an interlocking 
directorate or some similar purely mechanical change. These are not 
questions to which the answers can be worked out in advance in a law. 
They are properly matters of administration. 

Comparison with the Sherman Act. 

It remains but to compare the legislation proposed in these bills with 
the Sherman Anti-Trust Act. That Act condemns combinations in re- 
straint of trade or commerce making such combinations criminal offenses 
and also makes it criminal to monopolize or attempt to monopolize trade 
or commerce. The Act does not contain a definition either of restraint 
of trade or monopoly. If by “monopoly” is meant only a successful 
attempt to monopolize, and that to prove a violation of the Act it must 

92 


be proved not only that the combination controls prices, but that it has 
recently wilfully carried on a course of conduct to that end, then the pro- 
posed legislation has a wider sweep of condemnation, for in the proposed 
legislation monopolistic power, however and whenever obtained is de- 
clared contrary to public welfare. If, however, to “monopolize” in the 
Sherman Act means to have monopolistic power, then, of course, there is 
no difference in the scope of the things condemned in the second section 
of the Sherman Act and in the Third Bill. 

The court in interpreting the first section of the Sherman Act now 
seems inclined to hold a contract or combination in restraint of trade to 
be one which gives to any one, to some, or all of the parties monopolistic 
power. If this interpretation is adhered to then nothing is condemned 
in this section of the Sherman Act which is not condemned in the third 
Bill. Under the third Bill the court has power to dissolve any contract 
or combination if such dissolution would most effectively and promptly 
terminate monopolistic power. If this is not the meaning of the first 
section of the Sherman Act it is difficult to say what it does mean. To 
contend that a contract or combination in restraint of trade is any contract 
or combination which prevents competition between the parties would 
make the Act absurd on its face, as such interpretation would make an 
agreement of partnership between two rival concerns, when perhaps col- 
lectively they did not control a hundredth part of the product of the 
trade, a criminal combination. It is needless to say that the proposed 
legislation does not condemn such a contract, and if the first Section of 
the Sherman Act does in part do so, it becomes a pernicious piece of 
legislation impossible of enforcement. 

A fundamental difference between the Sherman Act and the Bills 
under discussion lies in the conception of the way in which the problem 
presented by the industrial trust should be approached. The Sherman 
Act assumes that monopoly invariably depends on combination, and that 
all that is necessary to destroy the power of the trust, is to dissolve each 
form of combination as it arises. The proposed bills on the contrary 
proceed on the assumption that monopolistic power is based on some 
natural cause or on the ability and willingness to carry on a course of 
unfair and oppressive conduct towards competitors. As a result the 
Sherman Act strikes at combination, while the proposed legislation 
attacks the causes which give to the combination its monopolistic power. 
Again, the Sherman Act assumes that the possession of monopolistic 
power, at least where it has been recently acquired as the result of a 
course of conduct, is criminal and must be punished by jail or fine. The 
proposed bills on the contrary, proceed on the assumption that monopo- 
listic power may in many cases be obtained without moral guilt, and that 
in any case the effective way to deal with those who possess it, is not to 
threaten them by statute with jail or fine on convictions which are almost 
impossible to obtain, but to subject them to administrative orders designed, 
while respecting property rights and avoiding interference with business 
efficiency, to destroy their monopolistic power. 

How far industry in this country at the present time is controlled by 
trusts is a question on which persons may differ. No one possesses a 
knowledge of the facts sufficient to give an answer to the question. But 
of this we can be assured, that the way to make the trust problem acute 


93 


is to leave it alone or to treat it in the inadequate way which we are 
treating it at present. Power grows on what it feeds on. It is easier 
to deal with a new trust than one long entrenched. Those who have been 
interested in the drafting of this bill personally believe that the very 
existence of the Commission provided for will tend to prevent attempts 
at monopoly; that the monopolistic power of many of the trusts now 
existing is based on their power and willingness to engage in unfair and 
oppressive competition, and that therefore the more extensive power 
lodged in the commission for use when the trust is based on natural 
causes, will rarely have to be exercised. But the surest way to lead this 
country in the near future into an era of price regulation or even govern- 
ment ownership of industry, is to do nothing now effectively to check the 
growth of industrial monopoly, or, creating a commission, to deny to it 
adequate power to end each existing monopoly irrespective of the basis 
on which its monopolistic power depends. The proposed legislation may 
be objected to as drastic. It may be criticized as giving too sweeping 
powers to a commission. But nothing is more irresponsibly powerful 
than a private monopoly, and the state in dealing with it should not itself 
hesitate to exercise power. 

Herbert Knox Smith, former Commissioner of Corporations (1904- 
1912) contrasts the practical operation of the Sherman Act with the pur- 
poses of the proposed bills in the following language : 

“Anyone familiar with the ludicrous results of the enforcement of 
the Sherman Law in the Standard Oil and American Tobacco Company 
cases will agree that the Sherman Law is wholly inadequate. The inside 
group that always controlled the Standard is now, because of that law, 
in stronger control of the real business of that Company than ever before. 

“The enforcement of the Sherman Law simply “dissolves” a com- 
bination into its constituent elements. Such action does not result in 
controlling or even hindering monopoly. Such dissolution does not 
restore competition. It did not in the Standard Oil case. There never 
was, for example, any competition between the National Transit Com- 
pany (pipe line), and the Acme Oil Company (refinery) ; both formerly 
under the Standard. Separating these two cannot make them compete. 

“If, on the other hand, an expert commission had taken up this prob- 
lem, its first order would have required that all the pipe lines of the 
Standard act as common carriers, serving all producers and refiners alike 
under the obligation of public service. This would have gone farther 
than anything else to break the Standard’s monopolistic power, which is 
now and always has been based primarily on special privileges and special 
advantages in transportation. 

“The Sherman Law simply applies, blindly, to all cases, one remedy, 
i. e., dissolution ; that is, dissolution on the lines of legal organization, not 
on the lines of economic conditions. What is required is a body that (1) 
knows what remedy is needed to meet the particular case, and (2) has 
power to apply the remedy promptly without years of litigation, whether 
that remedy be division, reorganization, or the imposing of public service 
obligations.” 

Conclusion. 

No set rule can be nor should be laid down and applied to all cases 
alike. The standards of fair business, the standards of safe business 


94 


should be prescribed by the law of the land, and it should be made the 
duty of an executive body of adequate power and prestige to enforce such 
standards, to the end that big and little business alike shall prosper; to 
the end that natural competition between man and man shall be preserved ; 
to the end that through both natural combination and natural competition 
the nation’s business shall be adequately developed; and to the end that 
there shall always be either the great power of a natural force or of a 
national law superior to the power of any private enterprise. 

A BILL. 

To Create an Interstate Trade Commission 

Be it enacted by the Senate and House of Representatives of the United States 
of America in Congress assembled, That there is hereby created and established an 
Interstate Trade Commission, which shall consist of seven members. On January 
first, nineteen hundred and fourteen, the Bureau of Corporations shall cease to 
exist, and all the employees, officials, funds, and records of said bureau, and all 
the powers and duties thereof and of the Commissioner of Corporations shall be 
transferred to and conferred upon the Interstate Trade Commission. The Com- 
missioner of Corporations holding such office on said date shall be ex officio a 
member of the commission for the first year of its existence. The remaining six 
members of the commission shall be appointed by the President, by and with the 
advice and consent of the Senate, and the terms of office of such commissioners 
so first appointed shall be for two, three, four, five, six, and seven years, respec- 
tively, from January first, nineteen hundred and fourteen, as designated in each 
case by the President, and thereafter all the commissioners shall hold office for 
seven years and be appointed by the President, by and with the advice and con- 
sent of the Senate. Any commissioner may be removed by the President for in- 
efficiency, neglect of duty, or malfeasance in office. The commission shall choose a 
chairman from its own membership and appoint a secretary, who shall receive a 
salary of $5,ooo a year. The commissioners shall each receive a salary of $10,000 
a year. A majority of the commission shall constitute a quorum for the transaction 
of business, but any one of the members of the commission may administer oaths 
and affirmations and sign subpoenas. The commission may, by one or more of the 
commissioners, prosecute any inquiry necessary to its duties in any part of the 
United States into any matter or question of fact pertaining to the business of any 
corporation or association subject to the provisions of this Act. All orders ad- 
judicating matters in controversy before the commission shall be approved by 
a majority of the commissioners. 

Sec. 2. That every corporation or association shall be subject to the juris- 
diction of the commission which is engaged in commerce among the several States 
or with foreign nations, and which, by itself or with one or more other corporations 
or associations owned, operated, controlled, or organized in conjunction with it so 
as to constitute substantially a business unit, has annual gross receipts exceeding 
$3,000,000 from business within the United States, excepting corporations or asso- 
ciations subject to the Act entitled “An Act to regulate commerce,” approved Feb- 
ruary fourth, eighteen hundred and eighty-seven, as amended, but including pipe- 
line companies. . . 

Sec. 3. That the term corporation or association, as used in this Act, snail 
include ail incorporated associations of two or more persons organized to. carry on 
business as coowners with a view to profit and all unincorporated associations of 
two or more persons organized to carry on business as coowners with a view to 

Pr ° fit *Sec. 4. That it shall be the duty of the commission and the commission shall 

have the power — . . . , . 

(a) To determine whether any corporation or association engaged m com- 
merce among the several States or with foreign nations, excepting corporations and 
associations, subject to the Act entitled “An Act to regulate commerce, approved 
February fourth, eighteen hundred and eighty-seven, as amended, but including 
pipe-line companies, is subject to the jurisdiction of the commission, and to deter- 

95 


mine whether any particular number or group of such corporations or associations 
are so owned, operated, controlled, or organized as to constitute substantially a 
business unit, having annual gross receipts exceeding $3,000,000 from business in the 
United States and are therefore subject to the jurisdiction of the commission. The 
determination of such questions of jurisdiction by the commission shall be final. 

(b) To require from all corporations or associations, subject to the jurisdic- 
tion of the commission, information as to their organization, conduct, management, 
security holders, financial condition, and business transactions to such a degree and 
extent and in such form as the commission may require, and to require from such 
corporations or associations complete access at all reasonable times to their records, 
books, accounts, minutes, papers, and all other documents, including the records of 
any of their executive or other committees. 

(c) To make, alter, enforce, and repeal regulations proper and necessary to 
enforce the provisions of this Act. 

(d) To require, by regulations duly made, uniform or comparable methods of 
accounting by the corporations or associations subject to the jurisdiction of the com- 
mission, and to prescribe the forms of accounting necessary to that end. 

(e) To make public, from time to time, the information received by it in such 
form and to such extent as the commission shall by regulations prescribe. 

(f) To point out and make public, from time to time, specifically and sepa- 
rately, in such form and to such extent as in the discretion of the commission will 
best advance fair, honest, and efficient business, all cases of material over-capitilaza- 
tion, unfair competition, misrepresentation, or oppressive use of credit of which any 
corporation or association subject to the jurisdiction of the commission may have 
been guilty, and whenever any action of such corporation or association shall, in 
the opinion of the commission, constitute a violation of the laws of the United 
States, to present such case to the Attorney General for prosecution. 

(g) To make an annual report which shall be transmitted to Congress, setting 
forth data obtained by the commission relevant to the general question of the regu- 
lation of interstate commerce, together with any recommendations for further legis- 
lation which the commission may desire to present. 

(h) To make an investigation and report as to the methods best adapted to 
the carrying out of a final decree of dissolution under the Act entitled “An Act to 
protect trade and commerce against unlawful restraints and monopolies,” approved 
July second, eighteen hundred and ninety, when such a decree shall have been 
entered against any corporation subject to the jurisdiction of the commission and 
when the court having jurisdiction of the enforcement of such decree shall refer 
the case to the commission for its action as herein provided. 

Sec. 5. That for the purposes of this Act and in aid of its powers herein 
granted the commission shall have power to compel the attendance and testimony 
of witnesses and the production of documentary evidence equivalent so far as appli- 
cable within its jurisdiction to the power conferred upon the Interstate Commerce 
Commission in the Act entitled “An Act to regulate commerce,” approved February 
fourth, eighteen hundred and eighty-seven, as amended, and specifically the commis- 
sion shall have power to require by subpoena the attendance and testimony of wit- 
nesses and the production of all books, papers, contracts, agreements, documents, 
or other things of every kind and nature whatsoever relating to any matter under 
investigation by the commission. Such attendance of witnesses and the production 
of such documentary evidence may be required from any place in the United States 
at any designated place of hearing, and in case of disobedience to such subpoena the 
commission, or any party to a proceeding before the commission, may, with the 
aid of the commission, invoke the aid of any court of the United States in requir- 
ing the attendance and testimony of witnesses and the production of books, papers, 
and documents under the provisions of this section. 

And any of the district courts of the United States within the jurisdiction of 
which such inquiry is carried on may, in case of contumacy or refusal to obey a 
subpoena issued by the commission to any corporation or association, subject to the 
provisions of this Act, or other person, issue an order requiring such corporation or 
association, or other person, to appear before said commission (and produce books, 
documents, and papers, if so ordered) and give evidence touching the matter in 
question, and any failure to obey such order of the court may be punished by such 
court as a contempt thereof. The claim that any such testimony or evidence may 
tend to criminate the person giving such evidence shall not excuse such witness 
from testifying. 


96 


The testimony of any witness may, with the consent of the commission, be 
taken at the instance of a party in any proceeding or investigation pending before 
the commission by deposition at any time after the inquiry is instituted. The com- 
mission njay also order testimony to be taken by deposition in any proceeding or 
investigation pending before it at any stage of such proceeding or investigation. 
Such deposition may be taken before any person authorized so to do by the com- 
mission and who has power to administer oaths. 

Any person may be compelled so to appear and depose and to produce docu- 
mentary evidence in the same manner as witnesses may be compelled to appear and 
testify and produce documentary evidence before the commission as hereinbefore 
provided. Such testimony shall be reduced to writing. 

Witnesses whose testimony is taken under the provisions of this Act shall 
severally be entitled to the same fees as are paid for like service in the courts of 
the United States. 

No person shall be excused from attending and testifying, or from producing 
books, papers, documents, or other things before this commission, or in obedience 
to the subpoena of the commission, whether such subpoena be signed or issued by 
one or more of the commissioners on the ground, or for the reason, that the testi- 
mony or evidence, documentary or otherwise, required of him may tend to criminate 
him or subject him to a penalty or forfeiture. But no natural person shall be 
prosecuted or subjected to any penalty or forfeiture for or on account of any trans- 
action, matter, or thing concerning which he may testify under oath or produce 
evidence, documentary or otherwise, before said commission in obedience to a sub- 
poena issued by said commission : Provided, That no person so testifying shall 
be exempt from prosecution and punishment for perjury committed in so testifying. 
The purpose of this provision is to give immunity only to natural persons who 
under oath testify in response to a subpoena of the commission or produce evi- 
dence, documentary or otherwise, under oath, in an inquiry instituted by the com- 
mission, in response to such subpoena. 

And to carry out and give effect to the provisions of this Act the commission 
is hereby authorized to designate and employ special agents or examiners, who shall 
have the power to administer oaths, examine witnesses and documentary evidence, 
and receive evidence. 


Sec. 6. That it shall be the duty of every corporation or association subject 
to the provisions of this Act to comply with the terms hereof, and to comply with 
the orders and subpoenas of the commission issued pursuant to the authority herein 
granted, and it shall be the duty of every corporation, association, or person to 
furnish to the commission such information as the commission may deem necessary 
and proper to determine whether any corporation or association is subject to the 
jurisdiction of the commission. 

Sec. 7. That it shall be the duty of every corporation or association subject 
to the jurisdiction of the commission, within four months after January first, nine- 
teen hundred and fourteen, or, if becoming subject thereto after said date, then 
within two months after so becoming subject thereto, to file with the commission 
written statements under oath showing such facts as to its organization, conduct, 
financial condition, management, security holders, operations, and business trans- 
actions as may be prescribed by the commission, and it shall be the duty of every 
corporation or association subject to the jurisdiction of the commission, to fur- 
nish to the commission from time to time such information as to its organization, 
conduct, financial condition, management, security holders, operations, and business 
transactions, and to such degree and extent and in such form as may be prescribed 
by the commission, and to afford to the commission or its duly authorized agents 
complete access to all its records, books, accounts, minutes, and papers, and all 
other documents including the records of any of its executive or other committees. 

Sec. 8. That neglect or failure by any corporation or association or by the 
officers or agents of any such corporation or association, subject to any of the 
provisions of this Act, to comply with the terms hereof or failure or refusal to 
furnish information required by the commission within sixty days after written 
demand for such information, shall constitute a misdemeanor and shall be punished 
by fine of not more than $100 for each and every day of the continuance of such 
neglect or failure. Any person who shall willfully make or give to said commission 
any false or deceptive return or statement required by this Act, knowing the same 
to be false or calculated to deceive in any material particular, shall be deemed to be 


9 7 


guilty of a misdemeanor and upon conviction shall be punished by fine of not more 
than $5,000 or by imprisonment for not more than two years, or by both fine and 
imprisonment. 

•See: g. That if any provision or requirement of this Act shall for any reason 
be held unconstitutional the validity of the remaining provisions 'or requirements 
of this Act shall not be affected thereby. 

A BILL. 

To Prohibit and Prevent Unfair Competition. 

tfe it .enacted jb.v th<> Senate and house of Representatives of the United States 
of Sfnierfcd in ..Congress' assembled, That unfair or oppressive competition in comu- 
merce among the several States and with foreign nations as hereinafter defined is 
hereby declared unlawful. ;i , ,, 

.$ec. 2. That the Interstate Tra,de Commission is hereby empowered and 
directed to prevent all corporations or associations subject to the jurisdiction of said 
commission from engaging; in or practicing supji unfair, or oppressive competition, ( , 

” Sec. .3. That unfair or oppressive competition as used in this Act is hereby 
defined to include the following business practices and transactions: 

, ,(a) The acceptance or procurement, of ratps or terms , of service from com r 
nion barriers not granted /,to other shippers under like conditions. 

(b) The acceptance, or procurement of rates or terms of service from com r 
mon carriers declared unjawful by the Act entitled “An Act to further regulate com- 
merce'' with foreign nations and among the States,’ 1 , approved February nineteenth, 
nineteen hundred and three ?i as amended. 

,(c) . discrimination in spiling prices as between localities or individuals which 
is not justified by differences, in cost of distribution. 

(d) Procuring, by bribery or any illegal r means,, information as to the secrets 

of. competitors, or procuring conduct on tjie part of employees of competitors incon- 
sistent with their duties to their employers. , 

(e) The making , pf oppressive exclusive contracts for the sale of articles of 
which the seller has a substantial monopoly, whether by patent, or otherwise, or 
oppressive exclusive contracts depending upon or connected with such articles. 

(f) The maintenance 6f' secret subsidiaries or secretly controlled agencies 
held out as independent of the corporation or association controlling the same and 
used for any of the foregoing purposes of unfair competition. 

tg) The destruction of competition through the use of interlocking direc- 
torates. 1 ' 1 . ’ ’ , 

;l '(h) Any other business' practices involving unfair or oppressive competition. 

Sec. 4 . That the Interstate Trade Commission is empowered' to mahe, alter, o f r 
repeal regulations further defihing mbre particularly the practices and business trans- 
actions of unfair or oppressive competition. 

Sec. 5. That whenever the Interstate Trade Commission shall have reason to 
believe that any corporation or association subject to its jurisdiction has been or is 
engaged in , unfair or oppressive competition it shall issue and serve, upon said 
corporation or association a written order, at least thirty days in advance of the 
time set therein for hearing,, directing said corporation or association to appear 
before said commission and show cause why an order shall not be issued by said 
commission restraining' and prohibiting said corporation or association, from such 
practice or transaction,' and if upon such hearing the commission shall be of the 
opinion j.hat the practice or. transaction, in question ^prohibited by this Act it shall 
thereupon issue such orc^r restraining, the same. , The .commission mgy at any time 
modify or set aside,..jn,,whol ) e.or.in parf, any order. issued by it under tliis Act. 

. , Sec. 6. That whenever said commission, upon the issuing of such restraining 
oijlder, shall find that said corporation or, association has,n9Jt, complied therewith said 
commission may petition the District Court of the United States, r within, any .dis- 
trict where the act in question took .. place or where (he said corporation or asso- 
ciation is located or carries on business, asking said ,court to .^ssue pn injunction 
to enforce the terms of such order. of the commission;; and such corirt is hereby 
authorized to issue such injunction, and also, in case of any violation of such injunc- 
tion m the discretion of the court, to issue an order restraining and enjoining said 
corporation or association from engaging in commerce amqng the several States 
and with foreign nations for stich time as said court may order. 


Sec. 7* That this Act shall not be construed to affect or in any way modify 
the powers heretofore granted to the Interstate Commerce Commission or the 
Attorney General under the “Act to regulate commerce,” approved February fourth, 
eighteen hundred and eighty-seven, and the amendments thereof. 

Sec. 8. That if any provision or requirement of this Act shall for any reason 
be held unconstitutional,, the validity of the, remaining provisions or requirements of 
this Act shall not be affected therejby. 

A BILL. 

To Protect Commerce Against Monopolies 

i 

Be it enacted by the Senate and House of Representatives of the United States 
<?f America in Congress assembled, That the Interstate Trade Commission is hereby 
empowered apd directed at auy time, either , upon its own initiative or upon the 
representation : or complaint of any person, corporation, or association, 1 to investigate 
fhe organization, conduct, and, management of any corporation , or, assciation subject 
to the jurisdiction of the said commission for the purpose of determining whether 
such corporation or, association exercises a substantially monopolistic power in any 
industry in which said corporation or association is engaged. , , 

Sec, 2. That any such corporation or association shall be regarded , as exer- 
cising “a substantially monopolistic, power” whenever such corporation or associa- 
tion, not being subject, to the obligation of public service in the given industry in 
question, exercises control over a sufficient, portion of such industry or over, suffi- 
cient factors^ therein to determine the price pqlicy jn that industry, either as , to raw 
fpateriajs or finished , or partly finished products. Such substantially monopolistic 
power exercised over commerce among the several, States or with foreign nations i$ 
fi^reby declared to,be contrary to public policy. , , 

Sec. 3. That whenever after such investigation the said commission shall find 
that such corporation or association exercises such substantially monopolistic power 
fhe commission is hereby further empowered and directed to determine ,by such 
further investigation as may be necessary whether such monopolistic power is based 
primarily on, artificial or on natural bases. , Ul 

Artificial bqses shqll, for the purposes of this Act, be, defined as — 

(a) The acceptance or procurement of rates or terms of service from com- 
mon carriers not granted to other shippers under like conditions. , 

(b) The acceptance or procurement of ra’tes or terms of service frorn cpm- 
pion carriers declaredi unlawful by the Act entitled “An Act to further regulate 
Commerce with foreign nations apd among the States/ 5 approyed February nine- 
teenth, nineteen hundred and three, as amended. 

,(c) Discrimination in selling prices as between localities or individuals which 
[i$ not justified by differences in cost of distribution. 

, (d) Procuring by bribery or any illegal means information as to the sqcrefs 

of competitors, or procuring . conduct on the, part of employees of competitors; in- 
consistent with their duties to their employers. , 

(e) The snaking of oppressive exclusive contracts for the, sale of articles .of 
which, the seller has a substantial monopoly, whether by patent, or, (Otherwise^ or 
oppressive exclusive contracts depending upon, or connected with such articles. 

(f) The maintenance of secret subsidiaries or, secretly controlled agencies held 

out as independent of the corporation or association controlling th,e ;same and used 
for any of th£ foregoing purposes of unfair competition. , 

(g) The destruction of competition through the use of interlocking direc- 
torates. . . , . r . . .. . , 

(h) Other business - practices involving, unfair or . oppressive, competition of 
like character as above set forth. 

Natural bases : shall, for the purposes of this Act, be defined as— , :TI 

(a) Control of natural resources. . , .. 

(b) Control of terminal or transportation facilities. 

1 (cj Control of financial resources. , , r? . i-t 

j (d) Any. other economic condition inherent in the; character of the industry, 

including, among such conditions, patent rights. 

Sec. 4. That whenever the commission shall -find, that any corporation or asso- 
ciation subject to its jurisdiction exercises a substantially mpnopplistic power, 
based primarily on artificial bases as herein defined, it shall be th. e duty of the 


commission to proceed forthwith to terminate such monopolistic power by the 
exercise of its powers heretofore granted to restrain and prohibit unfair or oppres- 
sive competition. 

Sec. 5. That whenever the commission shall find that any corporation or 
association exercises substantially monopolistic power, based primarily on a natural 
base or natural bases as herein defined, said commission shall issue and serve upon 
such corporation or association a written order to said corporation or association 
specifying such changes in the organization, conduct, or management of its property 
and business as in the opinion of the commission will most effectively and promptly 
terminate such monopolistic power, while at the same time safeguarding property 
rights and business efficiency. The commission in said order shall fix a reasonable 
time within which the changes ordered shall be put into effect by such corporation 
or association. 

Sec. 6. That whenever any corporation or association upon which such an order 
has been served as is provided for in section five of this Act shall refuse or neglect to 
comply with the same, the commission shall apply to the district court of the United 
States in any district where such corporation or association is located or carries on 
business, asking for an order by said court for the appointment of a supervisor or 
supervisors of such corporation or association, and it shall be the duty of such court, 
upon such request by the commission to appoint for a limited time such supervisor 
or supervisors for such corporation or association and to give such supervisors such 
powers as are usually granted to receivers and full power of such direction and con- 
trol over the organization, conduct and management of such corporation or asso- 
ciation and the business and property thereof as shall be best fitted to carry into 
effect the order of the commission. The supervisor or supervisors shall from time 
to time, upon the request of the commission, make full report to the commission 
as to the organization and business of such corporation or association, and said 
supervisor or supervisors shall have power to carry out any further orders which 
the commission shall from time to time make relating to such corporation or 
association. 

Sec. 7. That any court in terminating a supervisorship imposed as provided 
in section six of this Act may, in order to insure the permanency of competitive con- 
ditions, include in its decree a provision submitting the supervised corporation or 
association and its business, or any part thereof, to the supervision or direction of 
the commission for such time and in such manner as said court shall fix, and the 
commission shall be empowered to exercise such supervisory or directory pow’er as 
shall be conferred in said decree. 

Sec. 8. That whenever the commission shall conduct an investigation for the 
purpose of determining whether a corporation or association exercises substantially 
monopolistic power as defined in this Act or of determining the basis of such power, 
reasonable opportunity shall be granted in the course of the investigation to such 
corporation or association to be heard or to present evidence in its own behalf; and 
before the entry of any order requiring changes in the organization, conduct, or 
management of the property and the business of any corporation or association the 
commission shall issue and serve upon such corporation or association a written 
order at least thirty days in advance of the time set for hearing, directing said 
corporation or association to appear before the commission and show cause why 
an order should not be issued requiring such changes. The commission may at any 
time modify or set aside, in whole or in part, any order issued by it under this Act. 

Sec. 9. That the term “corporation” or “association” as used in this Act 
shall include all incorporated associations of two or more persons and all unincor- 
porated associations organized to carry on business as coowners with a view to 
profit, and shall also include any group of corporations or associations constituting 
substantially a business unit as heretofore defined by law. 

Sec. 10. That service of process, orders, or notices under the provisions of 
this Act may be had by service on any officer or agent of any incorporated or- 
ganization or on any member or agent of any unincorporated organization. 

Sec. 11. That nothing contained in this Act shall be construed to prevent or 
interfere with the enforcement of the Act entitled “An Act to protect trade and 
commerce against unlawful restraints and monopolies,” approved July second, 
eighteen hundred and ninety, or to modify or repeal said Act. 

Sec. 12. That if any provision or requirement of this Act shall for any rea- 
son be held unconstitutional, the validity of the remaining provisions or requirements 
of this Act shall not be affected thereby. 


IOO 


PROGRESSIVE NATIONAL SERVICE COMMITTEE 

FRANCES A. KELLOR ROBERT VALENTINE GEORGE W. PERKINS 

JANE ADDAMS RAYMOND ROBINS MARY H. INGHAM 

WILLIAM F. COCHRAN WILLIAM F. MORGAN PAUL U. KELLOGG 

GIFFORD PINCHOT CORNELIA E. BRYCE GUTZON BORGLUM 


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A CONTRACT WITH THE PEOPLE 

Platform of the Progressive Party adopted at its first National 
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A NEW SPIRIT IN PARTY ORGANIZATION 

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UNEMPLOYMENT— A PROGRAM FOR RELIEF 

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